“The major challenge now is logistics, with congested ports and the Federal Revenue strike potentially delaying shipments…”
Ronaldo Fernandes is a co-owner, consultant, and market analyst at Royal Rural, a market consulting firm. Fernandes holds a degree in Economics from Faculdade Anhanguera.
Ronaldo Fernandes, Royal Rural
AgriBrasilis – How can the trade war between China and the U.S. affect the grain market?
Ronaldo Fernandes – If there is an escalation in the trade war between China and the U.S., the immediate impact will be a sharp drop in Chicago prices, as the Chinese would stop buying American soybeans, reducing U.S. competitiveness. However, this movement would be offset by an increase in premiums in Brazil, as demand would shift here. The best scenario for Brazil would be a prolonged conflict, forcing China to seek an alternative supplier. However, the current situation suggests otherwise, with Trump aiming for a robust agreement. If the deal is reached and China increases purchases from the U.S., the effect could be the opposite: rising Chicago prices, while Brazilian soybean premiums and prices fall.
AgriBrasilis – Can Brazilian agribusiness benefit from Trump’s protectionist policies?
Ronaldo Fernandes – Brazil may gain in some areas and lose in others. If Trump stimulates domestic consumption in the U.S., the global market may see less American supply, benefiting Brazilian exports. Additionally, if countries like China and the European Union are affected by U.S. tariffs, they may increase purchases from Brazil. However, there are risks: if Trump expands subsidies to American producers, soybeans and corn could be sold at lower prices, pressuring Chicago and global values. Another factor is currency policy: if the dollar weakens to favor the U.S., the real may appreciate, affecting Brazilian competitiveness. Overall, the impact will depend on how other countries respond to U.S. measures.
AgriBrasilis – What are the expectations regarding Brazil’s bumper grain harvest?
Ronaldo Fernandes – The 2025 harvest is heading toward a record volume, with soybean production potentially reaching 173.3 million tons, but there are significant regional variations. Some regions experienced major losses, while others performed surprisingly well. Rio Grande do Sul recorded the biggest drop, with a 29% reduction, losing nearly 7 million tons. On the other hand, states like Mato Grosso, which initially had lower production projections, performed better than expected, with a significant increase in productivity.
The planted area expanded, and the average productivity stands at 62.16 bags per hectare. This combination of increased area and productivity offset some of the losses in certain regions, ensuring a strong harvest. However, the major challenge now is logistics, with congested ports and the Federal Revenue strike potentially delaying shipments. If premiums do not react and freight costs continue to rise, producers may struggle to secure competitive prices in the market.
“2025 promises intense competition, with the U.S., Ukraine, and Argentina fighting for market share…”
AgriBrasilis – What are the price expectations for soybeans in the coming months?
Ronaldo Fernandes – The outlook is not bullish. The USDA projects the largest global production in history, and despite strong consumption, ending stocks will also be at record levels. This has not yet been fully priced in and will put pressure on prices. Additionally, a potential rapprochement between China and the U.S. could worsen the scenario, as a trade deal could reduce Chinese demand for Brazilian soybeans, lowering premiums and pressuring domestic prices.
AgriBrasilis – How have exchange rate fluctuations affected the grain market?
Ronaldo Fernandes – The exchange rate has a direct impact on soybean and corn prices, with each $0.10 variation representing about R$2.50 per bag. The dollar has weakened recently, facing resistance at R$5.70. While domestic factors support a strong currency, externally, Trump is pushing for a weaker dollar to favor U.S. exports. Additionally, a possible resolution of the Russia-Ukraine war could strengthen the euro and weaken the dollar, potentially harming prices in reais for Brazilian producers.
It is also worth noting that there are rumors of a possible new coronavirus outbreak in China, as reported by the British tabloid Daily Mail. If confirmed, it could significantly impact the market.
AgriBrasilis – Why did 2025 start with positive projections for Brazilian corn exports?
Ronaldo Fernandes – Brazilian corn exports only gain real momentum from July onward, so this strong start to the year was a reflection of the closing of the 2024 season. However, 2025 promises intense competition, with the U.S., Ukraine, and Argentina vying for market share. Argentina’s weather remains uncertain, but there is no confirmed production collapse.
One of the main challenges is the drastic reduction in China’s import projections, from 23 million tons to just 10 million. In 2023, China was Brazil’s largest corn buyer, purchasing 16 million tons, but in 2024, this volume plummeted to just 2 million. If this trend continues, Brazil will lose one of its biggest corn clients, pressuring prices in the second half of the year.
The outlook remains uncertain, and producers must stay alert to sales opportunities and developments in China-U.S. negotiations, which could shape market behavior in the coming months.
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