Global Agriculture Walks the Tightrope: Supply Gluts, Trade Wars, and the Tariff Theater

TL;DR

• Wheat: U.S. imports surge to a 7-year high, exports slump, and stocks swell - globally, we’re flush with grain but edging toward structural fragility.

• Corn: Strong U.S. exports offset weaker feed demand; global stocks dip slightly, but tight margins remain the name of the game.

• Rice: India overtakes China as top producer; U.S. domestic use hits a record while exports slip - rice takes center stage in global food security.

• Soybeans & Oilseeds: Higher U.S. crush and tighter stocks amid global uncertainty; palm oil falls, tariffs stir the biofuel pot, and soy stays in the spotlight.

• Sugar: U.S. supply grows thanks to import flows, not production; high-tier tariffs drive a short-term surplus that may turn sticky.

• Livestock & Dairy: Pork and poultry diverge, dairy prices drop, and tariffs haunt red meat exports - protein markets resemble a policy-driven rollercoaster.

  
  

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WHEAT: Gluts, Imports, and the Ghost of 2017

The U.S. wheat market is flush with supply but yearning for the golden age of exports. Imports have surged to 150 million bushels. But while the grain bins brim, domestic use slips slightly on lower seed demand, and exports falter again, especially for HRS and HRW. The result? Ending stocks swell by 22% to 846 million bushels, while the price holds steady at $5.50, a reminder that supply gluts don’t always crush value - unless you’re Russia, Australia, or the EU, whose wheat exports are expected to shrink in a world rebalancing toward Ukraine and Canada. Global ending stocks may have edged up, but at 260.7 million tons, they’re still the lowest since 2015/16 - a sobering sign that while U.S. silos are full, the world remains precariously close to a squeeze.

COARSE GRAINS: King Corn and the Case of Vanishing Feed

U.S. corn is growing older in stocks yet younger in domestic demand. Feed and residual use was slashed by 25 million bushels, thanks to tepid winter disappearance. But exports? Up 100 million. Like a seasoned trader front-running a rally, buyers are flocking to U.S. corn, lured by competitive pricing. Still, ending stocks drop to 1.5 billion bushels, and the price sticks at $4.35. Globally, corn’s story is more fragmented: EU production is up thanks to Eastern Bloc gains, but Moldova and Kenya take hits. Global trade shifts mirror a diplomatic chessboard - Pakistan out, EU and Mexico in. With ending stocks gently declining to 287.7 million tons, the world’s coarse grain ledger shows signs of quiet tension - an uneasy calm before the next weather shock or geopolitical misstep throws markets back into 2012-style panic.

RICE: India Takes the Crown, Puerto Rico Pauses, and the U.S. Shrinks

In a Shakespearean twist, India has dethroned China to become the world’s largest rice producer, harvesting a record 147 million tons. This milestone, nine years in the making, underscores a global rice surge, with total trade hitting a record 60.6 million tons. Meanwhile, back in the U.S., rice is having a more sobering season. Supplies are slipping due to a pullback in medium- and short-grain imports (Puerto Rico took a rain check), while domestic consumption sets a new record at 169 million cwt, driven entirely by long-grain appetite. Exports retreat to 95.5 million cwt, battered by weak demand from Western Hemisphere buyers. Yet, the final balance feels more Hemingway than Kafka: clear-eyed and pragmatic. Ending stocks fall to 44.5 million cwt, and prices hold their ground. Globally, with rising consumption across Sub-Saharan Africa and record Indian exports, rice remains the unsung hero of caloric stability in an era of mounting uncertainty.

OILSEEDS: Biofuels, Brazil, and a Squeeze at the Margins

Soybeans are swapping identities between foodstuff, feedstock, and geopolitical chess piece. The 2024/25 U.S. outlook features higher crush (up 10 million bushels) and tighter stocks (down to 375 million), all while tariffs turn the biofuel trade into a supply chain Rubik’s Cube. Imports of used cooking oil are throttled, boosting soybean oil’s role in the energy transition. Globally, the scene evokes the 1980s oil glut, but this time it’s palm oil - production from Indonesia, Malaysia, and Thailand is down by 1.3 million tons, tightening the broader vegetable oil complex. Despite Brazil’s last-minute upgrade to its 2023/24 crop (now 154.5 million tons), global soybean production nudges lower. Yet crush rises across Brazil, Argentina, Ukraine, and the U.S., pushing global soybean meal use higher. Prices are a tale of two commodities: soybean oil up to 45 cents/lb, meal down to $300/ton. The world, it seems, is hungry for protein but anxious about fats.

SUGAR: Sweet Tariffs and Sour Production

If the sugar market were a Netflix series, this month’s episode would be titled Tariffs and Tones. U.S. supply is up by 144,000 STRV, thanks to high-tier tariff imports surging like a 90s tech IPO. Yet beneath the surface, domestic production - especially in Florida - has fizzled, dragged down by weaker sugarcane yields. Still, with consumption steady and imports gushing in, ending stocks rise to 2.016 million STRV, yielding a cushy 16.2% stocks-to-use ratio. But don’t sugarcoat it - refined beet and cane are elbowing their way into the high-tier space, potentially crowding out more imports later in the year. Mexico, meanwhile, stays frozen in last month’s script. The broader narrative? Sugar is no longer just about sweetness - it’s a battleground of trade policy, regional yields, and a latent reminder that even commodities have border control.

LIVESTOCK, POULTRY & DAIRY: From Tariff Trouble to Dairy Drama

The U.S. protein complex is living through a moment of every market is unhappy in its own way. Pork production is trimmed due to lighter pigs and reduced farrowings, while tariffs sap export demand for both pork and beef - especially to China. Yet beef output rises on heavier weights and cow/bull slaughter. Broilers are the golden child of Q2, with production and prices both up. Turkeys, on the other hand, look more like the subplot from a dark Cohen brothers’ film: falling production, lower exports, and tighter supplies drive up prices. Egg markets are the mood ring of agriculture - production is down, imports up, prices falling, with hopes pinned on flock recovery. Milk production climbs on more cows and better yields, but prices fall across the board: butter, cheese, NDM, whey - all downgraded. The all-milk price dips to $21.10/cwt. It’s a reminder that even in an inflationary world, some things - like protein prices - can still find gravity.

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