China is responding to trade tensions by expanding domestic wheat and corn production while diversifying imports, particularly from South America. This approach has softened global demand and kept prices under pressure.
Absa’s newly released AgriTrends report highlights that China’s wheat has moved from surplus to deficit after 2020, driven by feed demand, though improved harvests and a shrinking population have slightly narrowed the gap since 2024.
Corn consumption, dominated by feed requirements, has also led to past deficits, but recent domestic production improvements are easing import reliance.
China’s soybean market is a different story, however. Local production barely meets demand, leaving the country heavily dependent on imports, mostly from Brazil. Rising animal feed needs sustain strong soybean import demand, securing Brazil’s role as China’s primary supplier. Absa AgriTrends notes that this ongoing reliance shapes global soybean trade and keeps international prices in flux.
Brazil capitalises on trade gaps
Brazil has seized opportunities created by trade frictions between the United States (US) and China, ramping up soybean production and exports by 50% since the 2018 trade war. The Absa AgriTrends report points out that Brazil’s growing global market share is tempered by infrastructure bottlenecks.
Roads, railways, ports and storage facilities have struggled to keep pace, and this has led to the raising of freight costs and squeezing of margins. While global freight rates have softened, Brazil’s costs remain structurally higher than those of the US. If shipping conditions tighten, its competitive edge could be eroded.
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US: Record harvests amid price pressures
The US is expected to produce a record corn crop in 2025/26. Lower stock-to-use ratios and strong demand from Mexico have supported prices so far, but the upcoming bumper harvest, coupled with robust South American output, is likely to pressure CBOT grain and soybean prices.
Wheat prices remain under strain from global competition, particularly Russia, while soybean abundance from Brazil adds further headwinds. Absa AgriTrends notes that despite falling prices, levels remain above pre-pandemic benchmarks, reflecting a resilient global demand backdrop.
South Africa’s summer crops: Maize and soybeans
Domestically, the 2024/25 season brought a recovery for maize and soybeans. White maize production is up 27% and yellow maize 7%, helping total maize output exceed 15 million tons, well above national demand. Price relief has been moderated by delayed rainfall, regional stock shortages and tight supply in Southern Africa, which have kept SAFEX prices resilient.
Soybeans rebounded sharply to 2.64 million tons, the second-largest harvest on record. Despite downward price trends, prices have stabilised above R7 000 per ton, supported by regional demand and potential export opportunities.
Looking ahead, Absa AgriTrends projects that strong livestock feed demand and favourable weather could sustain soybean prices around export parity levels, even as global supply pressures continue.
Winter crops: Wheat faces supply challenges
South African wheat production has declined for two consecutive seasons due to floods and late frosts. Output dropped by 2.8% in 2023 and 6.1% in 2024, tightening domestic supply. SAFEX wheat prices have remained firm, supported by import tariffs and the rand’s performance.
Global wheat prices, however, are under pressure from Russia, Australia, the European Union and Canada, where bumper harvests and competitive pricing continue to weigh on the market.
Absa AgriTrends expects local wheat production to recover slightly in 2025/26, with SAFEX prices hovering above R6 000 per ton. The report notes that tariffs, exchange rates and input costs will continue to influence domestic prices and thus help South African producers maintain a price floor despite weak global markets.
The report underscores that global tariff dynamics, production recoveries and logistical constraints will continue to shape both international and domestic grain and oilseed markets in 2025.
For South African farmers, the interplay between global prices, domestic production and regional demand will be crucial in determining profitability and market opportunities over the coming seasons.
Click here to download the latest Absa AgriTrends report.
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