Over the past week, the EUR/USD currency pair rose by 0.0029 to 1.0273.

U.S. crude oil increased by $1.31 per barrel, reaching $77.88 per barrel.

Oil prices declined on Friday but recorded their fourth consecutive weekly gain. Concerns about supply disruptions, driven by U.S. sanctions on Russian oil producers, combined with expectations of demand recovery—spurred by a potential interest rate cut in the United States and increased kerosene consumption due to cold weather in the United States—are supporting the crude oil market.

Meanwhile, Chinese economic data released on Friday showed higher-than-expected GDP growth for Q4 and the full year 2024, driven by various stimulus measures. However, China’s oil refinery output in 2024 declined for the first time in over two decades, as plants reduced production in response to stagnant fuel demand and shrinking profit margins.

For the past week, CBOT March SRW wheat futures increased by 8 cents to close at $5.38 3/4 per bushel.

Over the previous week, Chicago March corn futures rose by 13 3/4 cents to close at $4.84 1/4 per bushel.

Througout the past week, March soybean futures in Chicago climbed by 8 3/4 cents to close at $10.34 per bushel.

Accumulated US export sales for the week ending January 09.

*Source: USDA

Weather:

Over the past week, weather conditions in the United States have been relatively favorable for the overwintering of winter crops. However, the snow cover is not very thick in some areas of the US Wheat Belt, and any potential cold snap could damage the crops. Across Europe, temperatures have not been too cold, with precipitation in some areas. Dry conditions persist in Australia, southern Brazil, and Argentina, though rain is expected in South America.

Over the next 10 days, temperatures in the US Corn Belt will be very low, with no precipitation. In the US Wheat Belt, conditions will also be very cold, with some snowfall in certain areas. In France and Germany, warm weather with rain is expected. Hungary and Poland will experience slightly cold temperatures with no precipitation. The Balkans will be warm and dry. Ukraine will see moderate cold with no precipitation. Weather in Russia will be very cold in the central regions, with no precipitation. Weather in India will remain dry, while China will experience cold temperatures with no precipitation. Indonesia and Malaysia will receive good rainfall. Australia will be hot with light showers. Brazil will have rainfall across the country, including the south. Argentina will see light rain at the beginning of the new week, but drought conditions with high temperatures will return afterward. The situation in Argentina is becoming more concerning due to the prolonged dry spell, and the expected beneficial rainfall may not materialize.

GRAIN EXPORTS:

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

U.S. wheat exports remain weak, while corn and soybean exports are strong. Weekly export sales for wheat and corn were good, but soybean sales were quite weak. Russian wheat exports have dropped to very low levels since the beginning of January. Ukrainian wheat exports are at 250,000 tons, while corn exports have increased sharply.

This week, the IGC (International Grains Council) released its January report on the global grain balance for 2024/25.

Key highlights from the report include:

IGC  -  January 2024

The balance for wheat and soybeans remains largely unchanged, but for corn, it reflects a sharp decline in stocks.

In its January report, the International Grains Council (IGC) forecasts global grain production for 2024/25 at 2,304.6 million tons, down by 6.7 million tons compared to November. Wheat production is expected to reach 796.3 million tons, an increase of 0.2 million tons. Russia’s total grain production is projected at 116.1 million tons, down by 1 million tons, including 81.3 million tons of wheat, a decrease of 0.5 million tons. Russian grain exports are expected at 50 million tons, down by 2.3 million tons, with wheat exports at 43.7 million tons, a reduction of 0.5 million tons. The EU’s total grain production is projected at 259 million tons, an increase of 0.6 million tons, including 119.5 million tons of wheat, down from 120.3 million tons in previous forecasts. Kazakhstan’s grain production remains unchanged at 22.9 million tons, including 18 million tons of wheat, with total grain exports reaching 11.9 million tons, of which 10.3 million tons will be wheat. Ukraine’s grain production is projected at 59.5 million tons, an increase of 0.5 million tons, including 25.4 million tons of wheat. Grain exports from Ukraine are expected to reach 42 million tons, up by 1.9 million tons, including wheat exports of 17.4 million tons, up by 1.2 million tons.

In its January report, IGC forecasts global corn production for 2024/25 at 1,218 million tons, down by 6 million tons from November and 12 million tons year-on-year. The U.S. corn production is expected at 377.6 million tons, compared to previous estimates of 384.6 million and 389.7 million tons. China’s corn production is projected at 294.9 million tons, down from 296 million but up from 288.8 million tons. The EU’s corn production is expected at 60 million tons, compared to previous estimates of 58.1 million and 61 million tons. Corn imports into the EU are forecast at 20.2 million tons, slightly lower than previous estimates of 20.7 million and 21 million tons. Global corn consumption is expected to rise to 1,239 million tons, up by 13 million tons compared to 2023/24. Global corn exports are forecasted at 181.6 million tons, compared to previous estimates of 180.7 million and 198.8 million tons, with the U.S. exporting 62.2 million tons, Brazil 40 million tons, and Ukraine 22.2 million tons. Global corn ending stocks for 2024/25 will be 271.9 million tons, down from 275.2 million and 292.2 million tons, marking the lowest level in the past 10 years. Ukraine’s corn production is expected to reach 26.5 million tons, with exports of 22.2 million tons. The global corn balance remains extremely tight, and if China’s stocks are excluded, only 90 million tons of corn remain available worldwide.

On Friday, wheat futures rose in both Chicago and Paris. U.S. markets will be closed on Monday. Temperatures in the United States are expected to drop significantly with minimal snow cover, potentially affecting crops in Kansas. Russia is also experiencing cold weather, with some areas lacking snow cover. A cold front is forecast for early February across the Black Sea region, which could cause crop damage in Russia, Ukraine, Romania, and Bulgaria. China’s state company Cofco has sold two cargoes of Australian wheat to customers in Indonesia and Thailand for delivery between January and February. The wheat was originally intended for Chinese customers but was redirected due to government policies aimed at protecting Chinese farmers. This signals weak wheat demand in China, which is also the case for corn.

According to SovEcon, Russian wheat exports in January will range between 1.8 and 2.2 million tons, down from 3.6 million tons in January 2024. Ukraine’s wheat exports will reach 0.8 million tons, down from 1.6 million tons. As of December 1, 2024, Russia’s wheat stocks stood at 18.7 million tons, compared to 24.8 million tons the previous year. Season-ending wheat stocks in Russia will drop to 10 million tons, including 6.3 million tons in commercial reserves and 3.7 million tons in state reserves, compared to 20.2 million tons last year. Ukraine’s ending wheat stocks will be 0.8 million tons, down from 1.2 million tons in 2023/24 and 4.2 million tons in 2022/23. SovEcon forecasts total Russian wheat exports for the season at 43.7 million tons, compared to the USDA estimate of 46 million tons, while Ukraine’s wheat exports are projected at 16.1 million tons. Since the start of the season, Russia has exported 30.5 million tons of wheat, while Ukraine has exported 10.1 million tons. Russia still has 13.2 million tons of wheat left for export, and Ukraine has 6 million tons. A year earlier, Russia had 26.7 million tons left for export, and Ukraine had 10.23 million tons, highlighting a significant difference. Russian wheat export taxes are rising again, and on February 15, 2025, the Russian wheat export quota will take effect. While this date will not be a turning point, it will have a psychological impact on the market and prices. Even after the quota is implemented, 10.6 million tons of Russian wheat remain available for export.

On Friday, corn futures rose in both Chicago and Paris. The conditions for corn development in Argentina are deteriorating, with 39% of the crop now rated as good or excellent, down by 3%, while 14% is classified as poor or very poor, an increase of 5%, according to the Buenos Aires Grain Exchange. Conab forecasts a record Brazilian corn production of 119.6 million tons, an increase of 3%, with exports at 34 million tons, down by 4.5 million tons, and ending stocks recovering to 3.5 million tons. Wheat production in Brazil is expected at 7.89 million tons, down by 2.6%. Since the beginning of the year, US corn exports have been strong, with Taiwan making additional purchases. U.S. soybean exports have also remained strong, partly in anticipation of a potential new trade war, the outcome of which remains to be seen. The U.S. dollar is currently strong, in contrast to the beginning of Trump’s previous term when it weakened. If corn prices in Chicago are to rise above 5 USD/bushel, Brazil must experience planting delays for its second corn crop, followed by an early end to the rainy season.

On Friday, soybean complex rose in Chicago, along with rapeseed futures in Paris and canola futures in Canada. During the week, newly elected U.S. President Trump and Chinese President Xi Jinping had a phone conversation described as very constructive for both sides. Analysts are closely monitoring for signs that another trade war can be avoided. In Argentina, 32% of soybean crops are rated good or excellent, down by 17%, while 21% are classified as poor or very poor, an increase of 13%. Drought in Argentina is rapidly deteriorating crop conditions for both corn and soybeans. Expected rainfall is forecasted at 30-50 mm, which, given the warm weather, will slow down crop drying for a few days. However, these rains are expected mainly in northern Argentina, while central and southern areas will receive less than 30 mm. Despite high U.S. soybean prices, Chinese purchases continued. However, in the coming weeks, trade will shift toward Brazil as soybean harvesting accelerates. Weather conditions in Brazil remain favorable for crop development, and an excellent production is expected. However, some analysts have revised their forecasts downward, with estimates now ranging from 170+ million tons to around 166 million tons.

The next few weeks will be critical in determining the positions of major players in global trade. Regional conflicts and geopolitical developments will also play a role. Over the coming years, significant changes in trade logistics, business management, and production automation are expected. Biofuels are likely to play an essential role in utilizing surplus grain and oilseed stocks, as they currently do.

Changes in FOB prices of major exporters in recent days:

During the week, FOB prices for commodities mostly declined.

Wheat – FOB wheat prices remained stable, except in Ukraine. The FOB price of Bulgarian wheat is at 233 USD/ton (- $1/ton for the week and - $3/ton from the previous week). The FOB price of Australian milling wheat is 229 USD/ton (+ $5 for the week and - $7 from the previous week), 10% protein wheat is priced at 224 USD/ton (+ $5 for the week and - $3 from the previous week), while Australian feed wheat is priced at 195 USD/ton ($190 the previous week). Australian wheat prices are rising, which is an excellent signal because supply is high, the harvest is nearly complete, and despite weak demand from China, prices are bouncing back.

Corn – FOB corn prices continued to rise this week, except in the United States and especially Brazil. Over the week, the FOB price of Brazilian corn dropped by 10 USD/ton to 208 USD/ton (+ $6 the previous week).

Soybeans – FOB soybean prices declined. The FOB price of Brazilian soybeans fell by 2 USD/ton (+ $6 the previous week) to 378 USD/ton. Brazil is currently harvesting its soybean crop, and record yields are expected. US soybeans remain consistently more expensive than Brazilian soybeans, and this trend is expected to continue at least until August.

During the past week, global vegetable oil prices showed no clear trend. Soyoil price in South America rose, sunseed oil price in Ukraine increased, palm oil price in Malaysia declined, and the price of vegetable oils in Rotterdam moved in mixed directions.

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