The EUR/USD currency pair dropped to 1.0390, while the price of US WTI light crude oil fell to 69.43 USD per barrel.

Oil prices declined on Monday following positive U.S. inflation data on Friday, which revived hopes for further interest rate easing by the Federal Reserve (FED). Meanwhile, supply concerns in Europe eased after reports that the "Druzhba" pipeline, which delivers Russian and Kazakh oil to Hungary, Slovakia, the Czech Republic, and Germany, resumed operations following its shutdown on Thursday due to technical issues at a Russian pumping station. Prior to the shutdown, the pipeline was delivering 300,000 barrels of crude oil per day. On Friday, U.S. President-elect Donald Trump urged the EU to increase imports of American oil and gas or face tariffs on the bloc's exports.

According to data from the Bureau of Economic Analysis published on Friday, the so-called core personal consumption expenditures price index, which excludes food and energy, rose by 0.1% from October and by 2.8% year-over-year. This marks the slowest growth rate since May. The report revealed a broad slowdown, with core service prices—a closely monitored category excluding real estate and energy—rising by 0.2% month-over-month, the slowest increase since August. Core goods prices, excluding food and energy, declined for the first time in three months.

Yesterday, March wheat futures in Chicago rose by 7 1/2 cents to $5.40 1/2 per bushel. Wheat futures in both Chicago and Paris increased moderately. U.S. markets will be closed on Tuesday for Christmas Eve and will reopen on Thursday. During the week ending December 19, 2024, U.S. wheat export inspections totaled 403,419 tons (compared to 300,889 the previous week and 473,007 a year earlier), with season-to-date exports reaching 11.94 million tons (compared to 9.39 million last year). SovEcon lowered its forecast for Russia's wheat exports for 2024/25 by 0.4 million tons to 43.7 million tons. The export projection for 2025/26 is 36.4 million tons, a relatively weak result for the upcoming season, attributed to expected low beginning stocks and a production below 80 million tons for 2025. Meanwhile, Turkey has eased its wheat import regulations, shifting from a 15% import and 85% domestic purchase requirement to a 25%/75% ratio. In Australia, the weather is hot, the wheat harvesting campaign is complete, and part of the crop is of poor quality. The country’s exports remain robust, and prices have dropped significantly.

Yesterday, Chicago March corn futures increased by 1 1/2 cents to $4.47 3/4 per bushel. Corn futures in Chicago and Paris increased slightly. The USDA reported a private export sale of 132,000 tons of corn to an unknown destination. Weekly U.S. corn export inspections were 1,122,861 tons (compared to 1,141,768 the previous week and 1,227,239 a year earlier), with season-to-date exports at 14.44 million tons (compared to 11.38 million last year). Expectations of a massive soybean production in Brazil continued to weigh on the market. While these remain projections rather than actual supply, the pressure will increase as Brazil begins stronger exports of its new soybean production in late February and early March. The wet season in Brazil has been favorable, supporting excellent yields. Even with a potential decrease in rainfall, sufficient moisture is expected to ensure high soybean productivity.

Yesterday, CBOT January soybean futures fell by 5 cents to $9.69 1/2 per bushel. Soybean and soymeal futures in Chicago declined, while soyoil futures increased. Rapeseed futures in Paris and canola futures in Canada rose. The USDA reported a private export sale of 132,000 tons of soybeans to China. Weekly U.S. soybean export sales reached 1,747,037 tons (compared to 1,695,935 the previous week and 1,119,363 a year earlier), with season-to-date exports at 27.00 million tons (compared to 22.30 million last year). Over the next 15 days, Argentina is expected to experience a dry spell, which could begin to cause problems for crops.

An analyst from Agricultural Economic Insights noted that if agriculture had a warning system akin to those for approaching hurricanes, several alarms would currently be sounding. The issue lies not in the tariffs the U.S. plans to impose but in the retaliatory measures from affected countries worldwide. At the very least, trade flows will shift, transportation costs will rise, and overall trade efficiency will decline, resulting in lower prices for agricultural producers. Economists from Iowa State University calculated that under Trump’s proposed tariffs—60% on imports from China, with a 10% counter-tariff from China—the consequences would be significant. After the tariffs implemented in 2018, the U.S. incurred losses of $81.3 billion, while China lost $63.3 billion. Under the new tariffs, U.S. losses could rise to $560.7 billion, and if China responds, to $665.4 billion. If all affected countries retaliate, U.S. losses could reach $911.8 billion. The analyst argued that avoiding the global market is impossible. Instead of imposing tariffs, the U.S. could enhance domestic production efficiency by investing, reducing business costs, and lowering wages, effectively becoming a second China that attracts global manufacturing. However, the analyst believes tariffs will likely not be imposed, with negotiations instead aimed at improving the U.S.'s global trade position. While some success may be achieved, it is unlikely to be substantial or long-lasting.