US tariffs increase grain market volatility

Grão Direto's expert analysis this Monday (July 14) indicates that the announcement of the imposition of 7% tariffs by the United States on Brazilian products has intensified volatility in the soybean and corn futures markets, impacting prices in Chicago and raising the dollar. This uncertain environment is putting pressure on the marketing strategies of Brazilian producers, who are having to reevaluate their operations in light of the trade tensions. See the full analysis:

How did the soybean market behave?

Supply and Demand Report: Global production and final stocks increased. Regarding Brazil and Argentina, production data for the new crop remained unchanged, with Brazilian stocks growing and Argentine stocks decreasing. China's soybean imports remain projected at 112 million tons.

USA vs China: the market reacts to the lack of a concrete agreement between the US and China and the tariffs imposed on the BRICS, especially the 50% tax on Brazil, leaving the market cautious and on the defensive.

Dollar reacted: The week was marked by high volatility, with the US currency reacting to the US president's tariff hike on Brazil, which could affect strategic companies and producers in the national economy.

In Chicago, the July 2025 soybean contract closed at US$10,04 per bushel, a significant 4,92% drop for the week. The March 2026 contract also fell, closing at US$10,38 per bushel, a 3,53% drop. The dollar followed suit, rising 2,40% to close the week at R$5,55. This scenario resulted in mixed market activity in the physical market, with some regions closing the week higher, while others closed lower.

What to expect from the soybean market?

Brazilian exports: In July, Brazilian soybean exports totaled 11,93 million tons, a 24% increase compared to the same period the previous year, according to Anec. China remained the largest destination for Brazilian soybeans, absorbing approximately 76% of exports in the first half of 2025. In addition to strong Chinese demand, factors such as the recovery of the global market, logistical difficulties in competing countries, and the reduced competitiveness of Argentine soybeans due to increased export taxes contributed to directing more buyers to Brazilian soybeans, consolidating Brazil as the world's leading supplier and sustaining annual export growth. Despite the significant volume, there was a slight decrease compared to June, following the seasonal pattern after the harvest.

Brazil vs USA: The announcement of US tariffs on Brazilian products brought volatility to soybean futures contracts in Chicago, initially pushing prices down due to fears of a drop in exports and possible trade retaliation, but with potential for recovery if major buyers, such as China, increase their purchases from Brazil. At the same time, uncertainty raises the dollar against the real, which benefits Brazilian exporters by making soybeans more competitive in the international market, although it increases the cost of imported inputs and puts pressure on production costs. Furthermore, this scenario could boost the premium paid at Brazilian ports, reflecting increased international demand for Brazilian soybeans and helping to offset any price declines in Chicago.

Dollar may continue to appreciate: The trade conflict between Brazil and the United States, exacerbated by the imposition of 50% tariffs on Brazilian products, has led to a sharp appreciation of the dollar against the real, reflecting investors' risk aversion and uncertainty regarding the future of bilateral relations. The expectation of a decline in Brazilian exports to the United States reduces the inflow of dollars into the country, while the possibility of retaliation and a tariff escalation increases exchange rate volatility and drives away foreign investors. This scenario further pressures the exchange rate, increases the price of imported products and inputs, and could negatively impact inflation and Brazilian economic growth.

The current scenario requires caution when seeking soybean trading opportunities. The market remains volatile, and there are currently few fundamentals to support a significant price increase. Technical analyses reinforce the downward trend, indicating that prices could approach the US$10,00 per bushel range. Despite this context, factors such as port premiums and the dollar's fluctuation can act as important counterbalances, creating more favorable conditions for specific negotiations and requiring producers to pay close attention to seize potential windows of opportunity.

How did the corn market behave?

Supply and Demand Report: The bulletin indicated lower global production and stocks, reflecting the decline in expected North American production. For Brazil and Argentina, production remained unchanged, but this resulted in an increase in Brazilian final stocks.

The harvest continued to progress, and the excess supply of cereals in the domestic market kept prices under pressure. This seasonal movement is expected by the market at this time of year and should ease with the completion of the harvest, but the excess harvested volume remains a concern.

North American harvest: Concurrent with the Brazilian harvest, the US harvest continued to develop fully, with the vast majority of producing regions reporting a very optimistic outlook regarding production.

In Chicago, the July 2025 corn contract closed at US$4,03 per bushel, a significant 6,50% drop for the week. On B3, the July 2025 contract saw the opposite trend, rising 1,73% to close at R$63,00 per bag. This decline was echoed in the physical market, with widespread declines.

What to expect from the corn market?

Brazilian exports: Brazilian corn exports began July at a slow pace, with shipments of just 120 tons, an 80,5% drop compared to the same period in 2024. The delayed start of the second crop harvest and the reduced availability of harvested grains explain part of this decline, and if this pace continues, July exports are unlikely to exceed 1 million tons. China, a major importer of Brazilian corn in previous years, will have a smaller market presence in 2025 due to a large local harvest and the quest for self-sufficiency, forcing Brazil to seek new markets, such as Iran, Egypt, and Vietnam, which do not have the same purchasing potential. Despite this, shipments are expected to accelerate over the coming months.

History repeats itself: The Brazilian corn sales scenario for 2025 is marked by a record harvest, which expands domestic supply and reinforces Brazil's position as a leading global exporter. However, this high volume brings challenges - the abundant supply puts pressure on domestic prices, especially due to logistical bottlenecks and storage shortages, forcing many producers to sell quickly after harvest, often accepting lower prices to avoid losses on grains stored outdoors. On the other hand, international demand remains strong due to tighter global stocks and increased consumption, favoring Brazilian exports in the second half of the year. Therefore, sales in 2025 once again require attention to the pace of shipments, price movements, and logistics infrastructure, so that producers can seize better opportunities and reduce risks in a year of abundant supply.

With the advance of the second-crop harvest and the consequent increase in logistics costs, combined with a very favorable outlook for corn production in the United States, the market presents few elements to support a consistent reversal in the price trend. However, considering the downward movement recorded in recent weeks, there is also no clear scenario for a continuation of this decline. The current environment, therefore, suggests stability, with the market alert to new factors that could alter the balance between supply and demand in the coming months.