The EUR/USD currency pair declined to 1.0343. The price of US WTI light crude oil rose to $73.16 per barrel.

Oil prices increased on Monday after U.S. President Donald Trump imposed tariffs on imports from Canada, Mexico, and China. This raised concerns about potential disruptions in the supply of crude oil from the two largest suppliers to the United States, but the prospect of lower fuel demand limited the price increase.

Tariffs on Canadian energy imports to the United States are expected to have a more disruptive impact on domestic markets than those on Mexican imports and could even be counterproductive to one of Trump's key goals—reducing energy costs. Analysts anticipate that these trade levies will have limited short-term effects on global oil and gas prices.

According to the U.S. Department of Energy, Canada and Mexico are the primary crude oil suppliers to the United States, jointly producing about one-quarter of the crude oil processed by American refineries into fuels such as gasoline and fuel oil. Industry sources indicate that the tariffs will increase costs for the heavier crude oil grades needed by U.S. refineries for optimal production, reducing profitability and potentially leading to a decline in output.

Yesterday, Chicago March wheat futures rose by 7 1/4 cents to $5.66 3/4 per bushel. Wheat futures in both Chicago and Paris increased. For the week ending January 30, 2025, U.S. export inspections for wheat totaled 252,637 tons, compared to 484,544 tons the previous week and 295,540 tons a year earlier, bringing total exports for the season to 14.03 million tons, up from 11.30 million tons last year. There was an unexpected turn of events yesterday regarding Trump's tariffs on Mexico and Canada, as after a meeting between the presidents, Mexico agreed to deploy 10,000 troops to its border with the U.S. to curb drug trafficking, leading the U.S. to postpone the tariffs by one month, with tariffs on Canada also being delayed by one month. In Kansas, 40% of winter wheat fields are in good to excellent condition, while in Oklahoma and Texas, the figures stand at 50% and 37%, respectively. According to Rusagrotrans, Russia's wheat exports in February 2025 are expected to reach 2.2–2.3 million tons, down from 4.4 million tons in February 2024, marking the lowest level since February 2020, when exports totaled 1.9 million tons, while January exports are estimated at 2.54 million tons, down from 4.08 million tons the previous year. IKAR reported that Russian wheat rose by 2.5 USD/ton compared to last week, reaching 239 USD/ton FOB, while SovEcon stated that last week's total Russian grain exports amounted to 660,000 tons, unchanged from the previous week, including 590,000 tons of wheat, up from 530,000 tons the prior week. A boost comes from the latest estimates of Australia’s wheat production, which is 2 million tons higher than initial production projections, increasing the country's export potential. Yields in Western Australia have exceeded expectations, pushing total wheat exports to an estimated 24 million tons, up from 22 million tons, while large quantities of feed wheat have been sold to buyers in Southeast Asia.

Yesterday, CBOT March corn futures increased by 6 3/4 cents to $4.88 3/4 per bushel, with corn prices increasing in both Chicago and Paris. Weekly U.S. export inspections for corn reached 1,252,056 tons, compared to 1,250,775 tons the previous week and 645,494 tons a year earlier, bringing total exports for the season to 21.75 million tons, up from 16.32 million tons last year. AgRural estimates that Brazil's first corn crop is 14% harvested, while second-crop planting has reached 9% of the planned aresa. February started weak for Ukrainian grain exports, with only 76,000 tons exported in the first three days of the month, compared to 313,000 tons in the same period last year. Algeria is looking to buy 240,000 tons of corn and 35,000 tons of soymeal from South America with March delivery, while Iran is seeking to purchase 60,000 tons of corn and 60,000 tons of soymeal, also with March delivery. Domestic corn prices in Brazil are rising as farmers delay sales, while buyers are eager to replenish stocks.

According to an analysis based on satellite images, corn and soybean fields in Argentina are significantly more affected by drought than current public forecasts suggest, with EarthDaily Analytics projecting Argentina’s soybean production at 45 million tons, compared to around 50 million tons estimated by other analysts, while the corn production is expected to be 42 million tons, well below the Buenos Aires Grain Exchange’s estimate of 49 million tons. Across half of Argentina, crop vitality is already weak, and new rainfall, which is not expected, would do little to change the situation.

Yesterday, March soybean futures in Chicago went up by 16 1/4 cents to $10.58 1/4 per bushel, with soybean, soymeal, soyoil futures in Chicago, rapeseed futures in Paris, and canola futures in Canada all increasing. Weekly U.S. export inspections for soybeans totaled 1,013,292 tons, compared to 738,028 tons the previous week and 1,751,510 tons a year earlier, bringing total exports for the season to 34.07 million tons, up from 29.44 million tons last year. In December, U.S. soybean processing reached 5.92 million tons, in line with forecasts, up 3.65% from November and 6.57% from December 2023, while soyoil stocks stood at 1.696 million pounds, down 7%. AgRural reports that Brazil’s soybean harvesting campaign is 9% complete, compared to 16% at the same time last year. Celeres has raised its Brazilian soybean production estimate to 174 million tons, up 3.2 million from the previous estimate, while StoneX has revised its forecast down to 170.89 million tons, a reduction of 0.51 million tons. Strategie Grains has increased its estimate for the EU’s 2025/26 rapeseed production to 19 million tons, up from 18.74 million tons in the previous estimate, while the sunseed production estimate has been lowered to 10.4 million tons. The EU soybean production estimate has been slightly raised by 0.1 million tons to 3.2 million tons, marking the first time soybean production has surpassed 3 million tons, while the market for rapeseed, soybean, and palm oils remains tight.

No one can predict Trump’s actions at the moment. His campaign promises included widespread tariffs on everyone, which were introduced and then immediately postponed. The goals were big and comprehensive, yet after stationing troops at the borders with Mexico and Canada and attempting to curb drug trafficking, all the major objectives seemed to vanish. Canada has now pledged to crack down on fentanyl trafficking using the same measures as Mexico. It is not easy to dismantle long-standing economic structures, nor does it necessarily make sense to do so. The U.S. needs workers, it needs cheaper oil, it needs to be a global leader in all industries, and it needs the dollar to remain the world’s dominant currency—but how can that happen if no one in the world needs the United States? Everyone pays a price, including the big players, if they want to stay big.

In the coming days, temperatures in South America will be high, with Argentina expected to be 4–8 degrees Celsius above normal. The extreme heat is combined with little to no rainfall, and each passing day reduces the potential yields of corn and soybeans. As spring approaches in the Northern Hemisphere, attention is shifting in that direction, and weather conditions there are becoming a key market driver. In Argentina, 20% of soybean fields are in good to excellent condition, down 2% from the previous week, while 28% of corn fields are rated good to excellent, also down 2%. Markets were supported yesterday by the delay in U.S. tariffs and the possibility of new trade negotiations between the three nations. In the coming days, prices will be further supported by worsening conditions for corn and soybeans in Argentina, alongside reduced wheat shipments from Russia and Ukraine. Meanwhile, India’s wheat production is expected to deteriorate further in February, likely forcing the country to import significant amounts of wheat in the new season. This time, India has no reserves, and authorities have no backup plan.