Global ag trade enters a new era as geopolitics turns into harvest-driving force
The rules of the global farm game are changing—and this time, the weather isn’t to blame. According to RaboBank’s Agri Commodity Outlook 2026, geopolitics has overtaken supply and demand as the key force steering what farmers plant, what traders ship, and what consumers pay for.
The report depicts a world split between American and Chinese spheres of influence, where “agricultural commodity exports have become pawns on a geopolitical chessboard.”
“Agriculture is no longer playing by supply-and-demand rules—it’s playing by geopolitical ones,” says Carlos Mera, Head of Agri Commodity Markets Research at Rabobank.
The battle of the farm bills
What began as a tariff war has turned into a full-scale subsidy race, the report notes. Governments from the United States and Brazil, to Indonesia, Argentina, and Russia have expanded farm support through direct payments, minimum price guarantees, and biofuel mandates.
For example, the Trump Administration’s One Big Beautiful Bill Act presented a substantial increase in agricultural support, adding $66 billion to farm programs. It also includes revisions to the Clean Fuel Production Credit to favor the United States-Mexico-Canada Agreement (USMCA) feedstock over those more removed countries.
On the other side of the world, agricultural subsidies over the last two decades have crowned Russia as the largest wheat exporter in the world.
In Latin America, Brazil has recently increased its ethanol mandate and boosted its agricultural sector with a $5.5 billion tariff relief package, while in Asia, Indonesia has upped its biodiesel mandate, and Argentina has lowered export taxes.
However, Rabobank states that these policies have dulled producers’ response to low prices and will likely keep total planted areas high, maintaining downward pressure on global grain and oilseed prices in 2026.
In the US, farmers anticipating trade friction with China—the top soybean buyer—cut acreage in the category to a six-year low while expanding corn to its largest since the 1930s.
The market research firm expects the resulting corn surplus by the end of the 2025-26 season to suppress volatility and hold prices down.
One world, two ag economies
Trade barriers continue to distort price signals between regions.
Before the Trump-Xi agreement, Brazil’s soybean export basis stood at $2 per bushel, compared with the $0.80 for the US Gulf and roughly $1 discounts in North and South Dakota.
Those gaps have since narrowed, but Rabobank warns new policy frictions could reopen them.
“We expect these geographic price differentials to persist or increase in 2026,” says Mera.
Meanwhile, United States Trade Representative officials are reviewing tariffs on products the country does not produce, such as coffee and cocoa. This could potentially ease costs for importers and restore trade with producing nations.
Commodity outlooks
Coffee
After record-high arabica and robusta prices in 2025, Rabobank forecasts a return to balance in 2025-26, and a surplus of seven to 10 million bags in 2026-27. Prices should stabilize between $2.50 and $3.50 per pound by late 2026, though short-term volatility remains likely.
Cocoa
Cocoa prices have nearly halved this year amid stronger output and soft demand. Rabobank projects a 723 million-pound surplus in 2025-26, and a potential 88 million-pound surplus for the following year.
Wheat
Global output is up about 55 million short tons in 2025-26, marking the first surplus in six years. Rabobank expects a 9 million short ton deficit in 2026-27 as lower prices prompt acreage cuts. Wheat will likely stay capped by cheap corn unless weather—or politics—upend supply.
Uncertainty is the only forecast
Mera adds that the agricultural sector has only entered the “middle game” of this geopolitical contest.
“We foresee continued trade disruptions, fluctuating regional prices, heavy government intervention, and a high probability of unexpected events,” he says.
Farmers, traders, and policymakers alike must prepare for a world where trade is disrupted and the unexpected is now the baseline, Mera adds.
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