Over the past week, the EUR/USD currency pair fell by 0.0116 to 1.0718. The price of US WTI light crude oil dropped by 0.89 USD per barrel to 70.38 USD per barrel.

Oil prices declined on Friday as the risk that Hurricane "Rafael" in the Gulf of Mexico would significantly impact U.S. oil and gas production decreased. Hurricane "Rafael," which led to a shutdown of 391,214 barrels per day of U.S. crude oil production, is expected to move slowly westward over the Gulf of Mexico, away from U.S. oil fields. At the same time, hopes are that the storm will weaken on Friday and over the weekend, according to the U.S. National Hurricane Center. The downward pressure today also stemmed from data showing that China’s crude oil imports dropped by 9% in October, as well as from the increase in U.S. crude oil inventories.

Over the previous week, CBOT December SRW wheat futures rose by 4 1/2 cents to close at $5.72 1/2 per bushel.

For the past week, Chicago December corn futures increased by 16 1/2 cents to close at $4.31 per bushel.

Throughout the past week, January soybean futures in Chicago have gone up by 36 1/2 cents to close at $10.30 1/4 per bushel.

Accumulated US export sales for the week ending October 31.

*Source: USDA

Over the past week, there was significant rainfall in the United States. In Western Europe, dry weather was favorable for fieldwork. In the Black Sea region, there was little rain. In Brazil, rain continued, while in Argentina, rainfall was light.

In the next 10 days, light to moderate rainfall, including some snow in the north, is expected in the US Corn Belt. The US Wheat Belt will experience warm and dry weather. In Western Europe, weather will be cool with light rain. The Balkans will see warm weather with light rain. Weather across Ukraine will be cool with light rain, while Russia will be cold with almost no precipitation. Weather in India and China is expected to remain mostly dry, with China also experiencing cold weather. Good rainfall is anticipated in Indonesia and Malaysia. In Australia, light rain is expected in the west and south, with more precipitation in the east. Rain will cover all of Brazil, while Argentina will have moderate rainfall across the country.

GRAIN EXPORTS:

* US (September- August)  /  * Russia, Ukraine and the EU (July- June)

During the past week, U.S. wheat exports were weak, corn exports were moderate, and soybean exports were very strong. Weekly export sales for wheat were moderate, while corn and soybean sales were excellent. Russian wheat exports are moving at around 1 million tons per week. Wheat exports from Ukraine have significantly decreased, while corn exports are increasing.

At the end of the week, the USDA released its November report on the global grain balance for 2024/25.
Key highlights from the report include:

USDA  -  November 2024

Wheat: No major changes occurred in the balance. Russia’s wheat production forecast was reduced by 0.5 million tons to 81.5 million tons. For corn, production forecasts for the United States and EU were also reduced, which lowered global and U.S. corn stocks, dropping below 50 million tons. Global soybean stocks are also down due to a reduction of just over 2 million tons in the US, and the soybean production estimate for the United States was also reduced.

On Friday, wheat futures in Chicago fell, while contracts in Paris mostly rose. Egypt purchased 290,000 tons of wheat—50,000 tons from Bulgaria, and 120,000 tons each from Ukraine and Romania. The FOB price for Bulgarian wheat was 261 USD/ton. Many offers of Russian wheat were made at the tender, but at a price of 265 USD/ton FOB, which buyers did not accept. Algeria purchased up to 600,000 tons of wheat with December delivery at 263 USD/ton C&F. Wheat has been harvested on 12% of areas in Argentina, and a new wheat production from Argentina will soon enter the market. Brazil’s wheat production was reduced to 7.5 million tons from a previously forecasted 7.9 million tons, according to StoneX.

Despite a lower yield (-2 million tons), Turkey has large wheat reserves, with USDA’s FAS reporting record end stocks of 5.3 million tons for 2023/24. Authorities suspended imports from June until October 15, 2024. Local wheat in Turkey is priced at 320 USD/ton, while imported wheat is 240 USD/ton, making the local product unsellable. In mid-October, authorities allowed importers to import 15% foreign wheat and buy the remaining 85% from state reserves. The state company TMO sells its reserves at 235–245 USD/ton, incurring substantial losses. Authorities may discontinue hidden subsidies to farmers as it proves costly for taxpayers, potentially reducing production in the country.

Corn: On Friday, corn futures in Chicago and Paris rose. USDA reported a private export sale of 200,480 tons of corn for an undisclosed destination. The USDA lowered its average corn yield estimate for the United States by 0.7 bushels/acre to 183.1 bushels/acre, reducing stockpiles. FranceAgriMer reported 58% of corn areas harvested in France (up from 38% the previous week). Anec expects Brazil to export 4.77 million tons of corn in November (compared to 7 million tons in November 2023).

Soybeans: On Friday, soybean and soyoil futures rose in Chicago, while soymeal futures fell. Rapeseed futures in Paris and canola futures in Canada also rose. The USDA reported private export sales of 107,000 tons of soybeans to China and 132,000 tons to an unknown destination. The USDA lowered its U.S. average soybean yield estimate from 53.1 to 51.7 bushels/acre, reducing production and ending stocks. The Buenos Aires Grain Exchange reduced its forecasted soybean planting area in Argentina for the 2024/25 season from 19 million to 18.6 million hectares, with 7.9% of the plan already planted. Anec projects Brazil will export 2.45 million tons of soybeans in November (compared to 4.6 million tons a year earlier).

February rapeseed futures in Paris rose 3.2% last week to 532.75 EUR/ton ($575/ton), up 7 EUR/ton for the month. November canola futures in Winnipeg increased 4.5% over the last two sessions to 465 USD/ton. According to the European Commission, rapeseed imports to the EU rose by 8% from last year to 1.92 million tons. Canadian canola is 100–110 USD/ton cheaper than European rapeseed, driving further import growth.

Palm Oil: Malaysia's palm oil production is expected to exceed 19 million tons in 2025. Achieving 20 million tons will take several years due to slow replanting and few new plantations. Foreign workers in plantations are gradually increasing, but it will take time to reach pre-COVID levels. Traders expect palm oil to exceed 1,140 USD/ton by June 2025. Starting in January 2025, sunflower oil prices may rise in line with palm, soy, and rapeseed oils due to reduced sunseed productions across the Black Sea region, down 7–8 million tons from 2023.

After a month of rain in South America, soil moisture in Argentina and Brazil is still below optimal levels. Soil moisture analyses show significantly lower levels than normal, which is widespread. Subsoil moisture remains low and is slow to recover, though it is essential for achieving high corn yields after the wet season. Corn relies on deep moisture to fill kernels and ensure a high yield.

Over the past week, it became clear that the White House administration is set to change, with Democrats conceding to Republicans. The new president, Trump, had promised significant changes across various areas prior to the election. His proposed increase in tariffs on imports to the US is expected to impact trade partners’ policies. Countries mentioned for tariff hikes include China, a familiar move from six years ago, and Mexico, which has not cooperated on addressing the migrant issue. Mexico also has another priority: banning the use of GMO corn for food. Analysts believe that the returning administration has learned lessons from the previous standoff with China in 2018, suggesting a different approach this time. However, these actions will likely drive up inflation in the United States, forcing the FED to adopt a more restrictive stance. Trade disputes may be different this time, not only with China but also with Mexico, the EU, and others. The new administration is expected to work on reclaiming U.S. export markets for agricultural goods, which could pressure other major exporters.

For the United State, a halt on used oil imports could boost the demand for soyoil in biofuel production, consequently reducing soybean ending stocks. A similar impact is expected for corn. Moving from E10 to E12 gasoline would significantly reduce the U.S.’s high corn stocks. Brazil and Indonesia follow this approach closely, driving up agricultural commodity prices in those countries. 

There is also an anticipated shift in the US approach to the war in Ukraine, likely aiming for a resolution with some new nuances. This could restore Ukraine’s market potential, while Russia may see some relief in certain areas, leading to an increase in its agricultural exports.

What could these changes mean for us? Changes in US trade relations with major partners may not directly impact the Black Sea Region. China may increase grain purchases from the Black Sea region, but a future agreement with the United States could bring everything back to previous levels. We could benefit from a steady biofuel policy that stabilizes, rather than depletes, global agricultural stocks, as this could drive up prices.

Changes in FOB prices of major exporters in recent days:

Throughout the week, FOB prices for various crops moved in different directions.

Wheat – FOB wheat prices declined for the third consecutive week, with the exception of the United States. Bulgarian wheat is priced at 231 USD/ton (down 7 USD/ton for the week, up 3 USD/ton a week earlier). The FOB price of Australian milling wheat stands at 243 USD/ton (up 4 USD for the week, down 4 USD a week earlier), wheat with 10% protein is at 234 USD/ton (up 3 USD for the week, down 3 USD a week earlier), and Australian feed wheat is at 203 USD/ton (199 USD a week earlier).

Corn – FOB prices for corn moved in mixed directions again. The FOB price for Brazilian corn dropped by 2 USD/ton over the week to 215 USD/ton (up 17 USD a week earlier). Corn from the United States and Argentina remains significantly lower-priced compared to other exporters, such as Brazil and Ukraine.

Soybeans – FOB soybean prices rose. The FOB price of Brazilian soybeans increased by 13 USD/ton (down 26 USD a week earlier) to 413 USD/ton. Soybeans from Brazil and the United States are priced closely, indicating ongoing competition.

Over the past week, global oil prices continued to rise, with few exceptions in certain markets.

Export prices Black Sea, USD/mt (compared to the previous week):