The global grain trade is forecast to contract by 7 percent in the 2024/25 marketing year, marking one of the steepest year-on-year declines in recent times. The downturn spans major staples - wheat, rice, corn, and other coarse grains - with the reasons behind the slump differing by commodity, according to the latest USDA report.
Wheat Trade Set for Sharpest Drop in Decades
Global wheat trade is projected to decline by 9 percent, driven by both increased self-sufficiency in importing countries and lower exportable surpluses among key suppliers. Notably, China and Pakistan have boosted domestic wheat production, reducing their need for imports. Meanwhile, Turkey, sitting on large stockpiles, has imposed new import restrictions.
On the supply side, major exporters including Russia, the EU, and Ukraine are facing smaller harvests, contributing to tighter global supplies. Despite the trade contraction, wheat prices have remained relatively stable, with export quotes showing a mixed trend - Russia and Argentina saw increases, while Australia and the U.S. experienced slight declines.
Corn Trade Down on U.S. and Ukrainian Output Slump
Global corn trade is expected to drop by 5 percent, mainly due to production declines in the United States and Ukraine, two of the world's largest exporters. Although Brazil saw higher production, growing domestic demand is curbing its export availability.
On the import side, China's demand for corn and sorghum has plunged, with imports down 65% and 46% respectively compared to last year. This marks the largest annual drop in China’s feed grain imports, reshaping global trade flows.
Still, the USDA’s latest update reflects some month-over-month improvements: U.S. corn exports have been revised upward, compensating for reductions in Argentina, Turkey, and Pakistan.
Rice Trade Sees Modest Dip Despite Record Production
Unlike wheat and corn, global rice production is projected to hit a new record, led by significant gains in India, Indonesia, and Cambodia. India’s removal of previous export restrictions has bolstered global supply, especially benefiting markets in Bangladesh and Sub-Saharan Africa.
Despite the high production, global rice trade is set to contract slightly, mainly due to decreased import needs from Indonesia, which expects better domestic output. Nonetheless, rice consumption and ending stocks are forecast to rise, particularly in Southeast Asia, where stockpiling is increasing.
Oilseeds: Biodiesel Demand Reshapes Trade Dynamics
In the oilseed sector, the spotlight is on Brazil, where growing biodiesel mandates are redirecting soybean oil to the domestic fuel market. As a result, soybean oil exports are projected to remain flat at 1.3 million metric tons, even though production is estimated to hit a record 12.0 million tons.
This trend has been building for a decade, with industrial consumption of soybean oil in Brazil more than doubling. Though a scheduled increase in biodiesel blend rates was postponed in February 2025 due to inflation concerns, demand remains robust.
Elsewhere, palm oil exports from Indonesia, Malaysia, and Thailand are expected to tighten as biodiesel programs expand. Meanwhile, rapeseed and sunflower seed oil production has grown, but hasn’t yet offset the tightening supply of palm and soybean oil. As a result, global vegetable oil prices remain elevated, despite a large crop in Argentina that may moderate future price hikes.
China's Role in Oilseed Trade Shifts
China is taking center stage in rapeseed trade. Its rapeseed imports have been revised up to 4.0 million tons, mainly sourced from Canada, Russia, UAE, and Ukraine. However, rapeseed meal imports have been sharply cut in response to China’s 100% tariff on Canadian rapeseed products, introduced in March 2025 as part of an ongoing trade dispute.
Soybean crush activity in Brazil and China is also on the rise, increasing the availability of protein meals like soybean meal, which is seeing strong demand from global buyers. This is offsetting a drop in Canada’s rapeseed meal exports.
Vegetable Oil Market Outlook: Tight Supplies, Firm Prices
The USDA report forecasts lower global vegetable oil production due to reduced palm oil output in Southeast Asia. Consequently, both vegetable oil trade and stocks are expected to shrink. Tight supplies of palm and soybean oil are likely to maintain high global prices through the end of the marketing year, despite potential moderation from Argentina’s increased crush.
While global grain and oilseed markets are experiencing significant trade realignments in 2024/25, the dynamics vary sharply between commodities. Some shifts are driven by changing climate and production levels, while others reflect evolving trade policies and domestic market priorities - particularly in the context of renewable energy and food security. As the USDA continues to monitor these developments, all eyes are on how global supply chains adapt to a year of transformation marked by tighter supplies, shifting demand, and continued price volatility.
Source: Rural Voice