Over the past week, the EUR/USD currency pair rose by 0.0224 to 1.0497.

The price of US WTI light crude oil fell by $2.73 per barrel to $74.66 per barrel.

Oil prices saw a slight increase on Friday but declined for the week after U.S. President Donald Trump released a comprehensive plan to boost domestic oil production. He also requested that OPEC reduce crude oil prices. Crude prices fell throughout the week as investors reduced war premiums following the ceasefire in Gaza while preparing for changes in Trump's energy policy.

On Monday, Donald Trump declared an energy emergency, lifting environmental restrictions on energy infrastructure as part of a large-scale plan to maximize domestic oil and gas production. According to the U.S. Energy Information Administration (EIA), crude oil inventories in the country reached their lowest level since March 2022 last week. The EIA report states that crude oil stocks declined by 1 million barrels to 411.7 million barrels in the week ending January 17, marking the ninth consecutive weekly drop.

Over the past week, Chicago March SRW wheat futures increased by 5 1/4 cents to close at $5.44 per bushel.

For the previous week, CBOT March corn futures rose by 2 1/4 cents to close at $4.86 1/2 per bushel.

Throughout the past week, March soybean futures in Chicago climbed by 21 3/4 cents to close at $10.55 3/4 per bushel.

Accumulated US export sales for the week ending January 16.

*Source: USDA

Weather:

Over the past week, the weather in the United States has been very cold, with precipitation in some areas. In Europe, conditions have been relatively warm with light rainfall. Russia has experienced colder temperatures, but with insufficient snow cover. Brazil has been receiving good rainfall so far. In northern Argentina, there have been some rains, but central and southern regions remain quite dry, despite localized precipitation.

Over the next 10 days, temperatures in the US Corn Belt are not expected to be extremely low, with no significant precipitation. The US Wheat Belt will experience moderate temperatures with light rainfall. In Western Europe, the weather will remain relatively warm with light rainfall. The Balkans will see warm and dry conditions. In Ukraine, temperatures will be moderate, with almost no precipitation. In Russia, it will be warm in the south and moderately cold in the central regions, with light precipitation throughout.

Weather in India will remain dry. China will experience cold weather with no precipitation. Indonesia and Malaysia will see good rainfall. In Australia, temperatures will be warm to hot, with light rainfall in the east. Brazil will receive widespread rainfall across the country. Argentina will see significant rain in the north, while central and southern regions will have moderate to light rainfall. The situation in Argentina remains mixed, leading to varying conditions for corn and soybean crops. Overall, the outlook is neither very good nor extremely bad.

GRAIN EXPORTS:

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

During the past week, wheat exports from the United States were weak, while corn and soybean exports were strong. Weekly export sales of wheat were low, but those of corn and soybeans were very good. Wheat exports from the EU lag significantly behind last year, with the gap widening. Wheat exports from Russia and Ukraine remain at very low levels. Ukraine's exports remain stable at around 250,000 tons per week, while Russia's have fallen below 500,000 tons per week. Corn exports from Ukraine have also declined.

At the end of the week, traders sold off to lock in profits from the previous days. Despite this, the week ended with price increases for major crops. On Friday, markets were influenced by the reduction of export duties on agricultural products in Argentina.

Wheat

On Friday, wheat futures in Chicago and Paris declined. For the week ending January 16, 2025, U.S. wheat export sales amounted to 164,837 tons (compared to 513,424 tons the previous week and 451,368 tons a year earlier). Total export commitments reached 17.69 million tons (compared to 16.55 million tons last year). Weekly exports were 201,316 tons (compared to 196,545 and 323,097), bringing the total exports for the season to 12.76 million tons (compared to 10.51 million tons last year).

Corn

On Friday, corn futures in Chicago and Paris declined. U.S. weekly corn export sales were 1,660,968 tons (1,024,234 and 954,796 in previous weeks), total export commitments reached 41.93 million tons (32.48 million tons last year), weekly exports were 1,516,686 tons (1,484,287 and 931,753), and total exports for the season stood at 19.61 million tons (15.36 million tons last year). Argentina is reducing its corn export tax from 12% to 9.5% for the period January 26 – June 30, 2025.

Soybeans

On Friday, soybean and soymeal futures in Chicago declined, soyoil futures increased, rapeseed futures in Paris declined, and canola futures in Canada were volatile. Sales of soymeal reached 210,240 tons, while soyoil sales totaled 2,890 tons. Argentina is lowering its soybean export tax from 33% to 26% and soybean oil duty from 31% to 24.5% for the period January 26 – June 30, 2025. Algeria has purchased 25,000 – 35,000 tons of soymeal, most likely from Argentina, for delivery at the end of February.

The Argentinian government is lowering export taxes on corn, soybeans, and soymeal. Analysts expect that farmers will accelerate sales of their stocks rather than holding out for higher prices. Market movements in South America now largely depend on weather forecasts, especially in Argentina, and on expected record corn and soybean productions in Brazil.

Market Uncertainty and Global Developments

These are turbulent and highly uncertain times, dominated by geopolitics and multiple conflicts worldwide. In some regions, solutions are being sought; in others, they are not. Easing tensions in the Middle East immediately impacted the markets, restoring trade flows and reducing transportation costs for some buyers.

La Niña has returned to the discussion, bringing heavy rainfall to central Brazil and drought conditions to central and southern Argentina. However, the phenomenon is not yet strong, as indicated by its mild effects in Australia and South America. It is expected to remain moderate until April, gradually weakening thereafter.

The Buenos Aires Grain Exchange has lowered its corn production forecast for Argentina by 1 million tons to 49 million tons and its soybean production forecast by 1 million tons to 49.6 million tons. The Rosario Grain Exchange expects 48 million tons of corn and 53 - 53.5 million tons of soybeans. The next 15 days will remain dry in central and southern Argentina, which could worsen the drought and lead to further downward revisions in production forecasts to around 45 million tons for both crops. While Brazil’s expected record soybean production can offset these losses, the global corn supply remains tight with no alternative source to compensate for the deficit.

Brazil is currently at no risk of drought. Earlier concerns about dry conditions in southern regions have mostly disappeared following recent rainfall.

Market Resilience and Outlook

Wheat, corn, and soybeans ended the week with gains, despite significant market uncertainty. Markets remain surprisingly resilient, resisting declines. Some analysts view this resistance as a key indicator of an emerging bullish market. Signs of such a trend have been evident for some time in the corn market.

Previously, there were concerns over a new, uncontrolled trade war, but negotiations are now taking shape. These talks—perhaps difficult—are expected to lead to agreements and stabilize market conditions.

Soybeans have remained relatively stable, despite broader market challenges, and may soon join corn in a sustained upward trend. Wheat remains weak in terms of rally potential, but given the tight global corn balance, wheat is increasingly being used as feed. This is not yet fully reflected in prices, but low global wheat reserves will eventually drive prices up to new equilibrium levels.

The Rusagrotrans forecast for Russian wheat exports in January 2025 is 2.4 million tons, up from their previous estimate of 2 – 2.1 million tons. This is the lowest level in four years, as January 2022 exports were 1.9 million tons. The February export forecast is 2.5 million tons, compared to 4.4 million tons in February 2024. Between January 1 and January 16, Russian wheat exports totaled 0.9 million tons.

Last week, Russia exported only 390,000 tons of wheat, down from 520,000 tons the previous week. The situation in Russia remains complex—there is still wheat available for export, but Russian wheat prices have been slightly higher than competitors, affecting demand. Additionally, Russia's centrally managed export system plays a role. Authorities are considering measures to prevent domestic food shortages, focusing on maintaining ample feed grain supplies to ensure affordable livestock feed. The coming weeks will reveal whether these policies will significantly impact exports.

Weather Challenges in Brazil

Heavy rainfall continues in central Brazil, which has persisted for weeks. While beneficial for soybean pod filling, it is now disrupting the harvesting, causing delays and quality deterioration. Under normal conditions, 50 – 100 mm of rain in late January would be expected, but some regions are already exceeding this threshold.

As a result, yields are declining, and the harvesting campaign is being delayed, which is also postponing the planting of Brazil’s second corn crop. As of January 24, 2025, only 4% of Mato Grosso’s soybean areas have been harvested, compared to the average of 13% and 21.5% last year. Some rain relief is expected in the coming days, allowing farmers to catch up on harvesting progress.

The situation should not come as a surprise, given that wet weather in October delayed soybean planting by two weeks. As a result, the window for planting Brazil’s second corn crop is now extremely tight. Farmers must harvest soybeans and plant 80% of the second corn crop within a month, completing both operations by the third week of February. This is crucial, as corn pollination needs to occur while Brazil's rainy season is still active.

If this tight schedule is met, soil moisture levels will be sufficient for a decent corn production. However, any further delays will gradually reduce yields. While minor yield reductions might not significantly affect prices, a more severe shortfall could push prices higher.

Final Thoughts – Cautious Optimism

The outlook remains moderately optimistic, as market trends align with precise data rather than mere speculation. Additionally, global economic growth is expected to stabilize or even slightly improve, which would increase confidence and reduce uncertainty about future economic conditions.

Changes in FOB prices of major exporters in recent days:

During the week, FOB prices for most crops were generally increasing.

Wheat – FOB wheat prices rose, except in Ukraine. The FOB price of Bulgarian wheat is 238 USD/ton (+$5/ton for the week and -$1/ton from the previous week). The FOB price of Australian milling wheat is 232 USD/ton (+$3 for the week and +$5 from the previous week), wheat with 10% protein is 225 USD/ton (+$1 for the week and +$5 from the previous week), while Australian feed wheat is 198 USD/ton (compared to $195 the previous week). Australian wheat prices continue to rise, given the high supply following the harvesting campaign, despite weak demand from China.

Corn – FOB corn prices continued to rise this week. The FOB price of Brazilian corn remained unchanged at 208 USD/ton (-$10 from the previous week).

Soybeans – FOB soybean prices declined. The FOB price of Brazilian soybeans increased by 4 USD/ton (-$2 from the previous week), reaching 382 USD/ton. Brazil is currently harvesting its soybean crop, and expectations remain for record yields. U.S. soybeans remain consistently more expensive than Brazilian soybeans, and the price gap continues to widen.

Over the past week, global vegetable oil prices predominantly declined.

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