Soybean market reacts to US weather, Iran tensions

The combination of adverse weather in the United States, geopolitical tension in the Middle East and the record harvest in Brazil has been shaking up the grain market. According to the Grão Direto Specialist Analysis, soybean prices continue to react to the conflict between Israel and Iran, while rains in the Corn Belt threaten the planted area in the US. In corn, good Brazilian productivity and the slow progress of the harvest are putting pressure on prices, but domestic demand and adjusted stocks may limit further declines. Check it out: 

How did the soybean market behave?

Supply and Demand Report: Changes in soybeans were small. In the United States, there was no change in production or final stocks. There was also no change in production forecasts for Brazil and Argentina, with a small increase in final stocks.

Conab Bulletin: the Company raised its forecast for the 2024/25 soybean harvest to 169,6 million tons, a historic record, representing an increase of 14,8% compared to the previous season, which was affected by drought.

Escalation of conflict: Israel's new attack on Iran shook the markets, especially the oil market, causing prices to soar this Friday (13), impacting soybean oil prices.

In Chicago, the July 2025 soybean contract closed at US$10,68 per bushel, up 0,95% on the week. The March 2026 contract also rose, closing at US$10,81 per bushel, a gain of 1,98% over the period. The dollar fell 0,54%, closing the week at R$5,54. In the physical market, prices rose slightly in most regions, in line with the positive scenario for futures contracts.

What to expect from the soybean market?

US-China Trade War: The temporary reduction in tariffs on US soybeans from 125% to 10% allowed symbolic purchases from China, but the flow of imports continues to be mostly directed to Brazil. Weekly sales of US soybeans to China plummeted to the lowest level in 2025, totaling just 61,4 thousand tons, which represents a drop of 74% compared to the average of the last four weeks.

In this scenario, Indonesia stands out as the main destination for North American soybeans, while China is no longer among the largest buyers of US grain. On the other hand, Brazil continues to be the main supplier of soybeans to China, accounting for an impressive 72% of exports to the Asian country.

US Harvest: The heavy rains that hit the Corn Belt (Iowa, Illinois, Indiana) considerably interrupted the accelerated pace of soybean planting, damaging the ideal window for sowing.

If these rains persist through June 20, a significant portion of the unplanted areas could be completely abandoned, which would result in a significant reduction in the total area allocated to soybean cultivation, compared to initial estimates. In addition, after June 20, producers will lose insurance coverage, which increases financial risk. Weather forecasts indicate above-average rainfall through June 18, which will make it difficult to use machinery.

Rainy weather: Weather forecasts for the coming days indicate above-average rainfall in the Corn Belt through June 18, with accumulations of up to 150 mm in some regions such as Iowa and Illinois. This volume of precipitation can make it difficult to use machinery, as fields can become flooded, making seeding and cultivation work more difficult and less efficient.

Faced with such conditions, many producers may be forced to change their cultivation plans, opting to plant shorter-cycle crops, which offer lower profitability but can be harvested within the ideal sowing period.

Brazilian agricultural risk: The taxation of LCI (Real Estate Credit Letter) and LCA (Agribusiness Credit Letter), currently exempt from Income Tax for individuals, may increase the cost of raising funds for agribusiness, making these investment options less attractive. This would make it difficult to finance projects in the sector, especially in infrastructure and agricultural production.

The reduction in the supply of cheap credit could affect the growth of agribusiness, increase production costs and result in higher prices for consumers. Although the measure will increase government revenue, it could harm Brazil's competitiveness in international markets and affect the growth of the agricultural sector.

Soybean prices are expected to continue reacting to geopolitical events, especially the conflict between Israel and Iran, in addition to the initial developments of the agreement between China and the US. The dollar is likely to remain under negative pressure, potentially breaking the R$5,50 barrier. As a result, soybean prices in Chicago are expected to show slight increases.

How did the corn market behave?

Supply and Demand Report: In corn, changes were also modest. In the United States, there was no change in production, just a slight drop in final stocks. In Brazil and Argentina, production remained unchanged, but there was an increase in the expectation of final stocks.

Conab Bulletin: Estimates for Brazil's second corn crop have been revised upwards, reflecting the increase in planted area and productivity of the second crop. As a result, total corn production in the country is now projected at 128,25 million tons, exceeding the 126,88 million tons forecast in May by Conab.

2025 Second Harvest: continued to advance timidly, at a slower pace than the same period last year. The state of Mato Grosso continues to lead the evolution, followed by Paraná and Minas Gerais, according to Conab. 

In Chicago, the July 2025 corn contract closed at US$4,45 per bushel, up slightly by 0,68% on the week. On the B3, the July 2025 contract fell by 1,97%, closing at R$63,30 per bag. In the physical market, however, downward pressure prevailed, with declines recorded in most regions.

What to expect from the corn market?

Impacts of the agreement between China and the USA: The trade agreement that temporarily reduces tariffs on products also impacts corn. Although the impact on corn is limited, due to the low volume of imports from China to the US, the agreement brings stability to the market and creates the expectation of a slight increase in exports of American corn to the Asian country.

However, Brazil and Argentina remain competitive suppliers, and the impact on prices is moderate, given the record US harvest and comfortable global inventories.

Consequences of the escalation of war in the Middle East: Iran has been one of the largest buyers of corn from Brazil, ranking third in 2024 and standing out as the main buyer this year, absorbing more than 35% of our exports, according to Secex. In addition, Iran is a relevant global supplier of nitrogen fertilizers, exporting more than 4,5 million tons annually, with Brazil being an important destination. Israel, in turn, is the third largest supplier of Potassium Chloride.

Furthermore, with the rise in oil prices, production costs, including the price of urea, also tend to increase, which ended Friday with an increase of 8,1%, and if the situation between Israel and Iran evolves into a conflict, the price of a barrel could exceed US$ 100 again.

Brazil vs USA: The arrival of the Brazilian harvest and good productivity in the US are putting downward pressure on corn prices, both in Brazil and on international markets. However, adjusted stocks and firm demand should prevent sharp declines in the medium term, according to Conab.

The delay in the second-crop harvest could restrict supply in the short term, keeping prices higher in some regions. Competition between Brazil and the US is expected to increase next season, especially in exports to China and other major buyers.

Exports remain slow: In the week ending June 5, the U.S. sold 791,3 thousand tons of 2024/25 corn, down 16% from the previous week, with the main buyers being Japan, Mexico, Colombia, South Korea and Egypt. For the 2025/26 season, cancellations exceeded sales by 29,6 thousand tons, reflecting a slow pace in futures contracts. In total, exports totaled 1,691 million tons, up 3% from the previous week.

In the current scenario, corn prices should continue to be pressured by the evolution of the harvest in Brazil. On the other hand, domestic demand should act as a balancing factor, helping to stabilize prices. In the international market, monitoring the development of the North American harvest will continue to be crucial, with the potential to generate volatility in prices.