The EUR/USD currency pair rose to 1.0300, while the price of US West Texas Intermediate (WTI) crude oil fell to $77.50 per barrel.

Oil prices declined on Tuesday but remained near a four-month high as the impact of new U.S. sanctions on Russian oil remained a key focus. Wholesale inflation in the United States unexpectedly slowed in December, aided by lower food costs and unchanged service prices, according to new data. The Producer Price Index (PPI) for final demand rose by only 0.2% on a monthly basis, according to a report released Tuesday by the Bureau of Labor Statistics.

Lower borrowing costs typically help stimulate economic growth, which could boost demand for "black gold." However, uncertainty about demand from major buyer China may offset the effects of tighter supply. The new sanctions on Russian oil are expected to affect crude shipments to China and India, although key players in these countries are still assessing the legal situation and exploring potential workarounds.

Yesterday, CBOT March wheat futures rose by 1 1/4 cents to $5.46 1/4 per bushel. Wheat prices increased in Chicago but decreased in Paris. In parts of the U.S. wheat-growing regions, the snow cover is thin, and a cold front is expected in the coming days, posing a risk to crops. Japan is seeking to purchase 132,888 tons of wheat from the United States, Canada, and Australia. Since the start of the season, EU wheat exports have reached 11.5 million tons (-35% compared to the previous season). Jordan purchased 60,000 tons of hard wheat at 267.6 USD/ton C&F, with delivery scheduled for March.

From January 1–10, Russia exported 480,000 tons of grain (1.476 million tons a year earlier), including 468,000 tons of wheat (-57%) and 10,400 tons of barley (-93%), with no corn exports reported. The decline is significant, and it remains to be seen whether this trend will reverse or persist until the end of the season. During the week of January 15–21, the export tax on Russian wheat will be 4,245 rubles/ton (down from 4,346 rubles the previous week). As of January 1, 2025, India's rice reserves reached a record 60.9 million tons against a target level of 7.6 million tons. Wheat reserves stood at 18.4 million tons (target: 13.8 million tons, five-year average: 26.7 million tons). Wheat consumption in India has been rising rapidly, while rice reserves have also grown. Dietary habits have shifted, with more wheat being consumed over rice. By maintaining high domestic wheat prices, authorities aim to redirect some consumers toward rice, but this has proven difficult as living standards rise.

Yesterday, Chicago March corn futures fell by 2 cents to $4.74 1/2 per bushel. Corn futures also decreased in Chicago and Paris. Today, the EIA is expected to release ethanol production data for the United States. Given increased inventories, production is likely to decline steadily. Conab projects Brazil’s corn production at 119.55 million tons (-0.08), while Anec estimates January exports at 2.98 million tons (+0.8% compared to the previous forecast). AgResource forecasts Brazil’s 2024/25 corn production at 122.39 million tons (down from 123.56), while Rabobank estimates 126 million tons (+1 from November). Since the beginning of the season, EU corn imports have reached 10.6 million tons (+5% year-on-year).

Yesterday, March soybean futures in Chicago declined by 5 1/2 cents to $10.47 1/2 per bushel. Soybean and soymeal futures declined in Chicago, while soyoil futures rose. Rapeseed futures in Paris and canola futures in Canada also fell. The USDA reported a private export sale of 198,000 tons of soybeans to China. U.S. soybean processing in December reached 5.59 million tons (+6.4% from November, +5.2% year-on-year). Conab forecasts Brazil’s soybean production at 166.32 million tons (+0.11 from December). Anec projects January soybean exports from Brazil at 2.19 million tons (+0.48). Since the start of the season, Brazil has imported 7.4 million tons of soybeans (+14%) and 10.6 million tons of soymeal (+31%). The Malaysian Palm Oil Board forecasts 2025 palm oil production in Malaysia at 19.5 million tons (-1% from 2024), with exports at 17.3 million tons (+2.4%).

In central Argentina and southern Brazil, the weather is hot and dry. Light rainfall is expected at the end of the week, with more forecasted for the following week. However, insufficient rainfall could significantly reduce yield potential in these regions.

Brazil is experiencing a storage shortfall of 124 million tons, with a 5 million-ton increase in the deficit expected this season alone. The rapid growth of grain production in Brazil is outpacing storage capacity.

For some time, no ships have been available for exports at Bulgarian ports.