Global Commodities: Big crops are unlikely to build world stocks, agri outlook into 2H25
Jun 27, 2025
Explore the shifting dynamics of global agricultural markets as farmers face increasing demand against constrained supply. Delve into the anticipated challenges as upcoming USDA reports reveal the tension in crop availability. Discover how geopolitical factors and the demand for biofuels play a pivotal role in shaping market trends. With the BCOM Agri Index down 4% year-to-date, the outlook for the agricultural sector continues to raise eyebrows, especially as we approach the critical growing season.
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insights INSIGHT
Demand Outpaces Supply Growth
Supply growth in agriculture is significant, but demand growth outpaces supply, preventing stock builds.
Carry-in stock levels remain very low, particularly for corn, wheat, sugar, and cotton.
insights INSIGHT
Biofuels Fuel Agri Demand
Biofuel sector drives strong agricultural demand despite slower global growth.
Major biofuel blend increases announced in the US, Brazil, Indonesia, and Malaysia boost demand prospects.
insights INSIGHT
Prices Drop Amid Tight Fundamentals
Agricultural prices have dropped to contract lows despite tight fundamental supply-demand balances.
Investor risk appetite has turned negative amid US trade tensions affecting exports.
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Looking at the latest outlook for the agri markets and where the risks lie ahead of upcoming formative USDA acreage and stocks reports. As we turn to 2H25, and formative stages of the northern hemisphere growing season and South American export window, most agricultural markets under coverage are trading at price levels below producer gross margins, with arguably negative risk premium across grain, sugar and cotton markets. The BCOM Agri Index down -4% YTD. Our June 2025 Fundamental Outlook continues to highlight that supply-side increases are being absorbed by demand, perpetuating the multi-year decline in global agri commodity availability through 2025/26.
Speaker
Tracey Allen, Head of Agricultural Commodities Strategy
At Any Rate