Over the past week, the EUR/USD currency pair declined by 0.0069 to 1.0501.

The price of US West Texas Intermediate (WTI) crude oil rose by $4.09 per barrel, reaching $71.29 per barrel.

Oil prices increased on Friday, marking their first weekly gain since late November, as additional sanctions against Iran and Russia heightened supply concerns, despite surplus forecasts weighing on the markets. Data this week revealed that China’s crude oil imports in November grew year-on-year for the first time in seven months. This increase was driven by lower prices and stockpiling efforts. There has also been a slight recovery in refinery margins since the September lows, which justifies the crude oil import volumes seen in November.

The European Central Bank (ECB) unsurprisingly reduced its interest rates by 0.25% during its final meeting of the year. As of December 18, 2024, the deposit facility rate, main refinancing operations rate, and marginal lending facility rate will be lowered to 3.00%, 3.15%, and 3.40%, respectively.

The number of Americans filing new unemployment claims unexpectedly rose last week, according to new data. Initial claims for unemployment benefits in the U.S. increased by 17,000 to a seasonally adjusted 242,000 for the week ending December 7, the Labor Department reported on Thursday, compared to market expectations of 220,000 claims for the week.

Over the previous week, CBOT March SRW wheat futures declined by 5 cents to close at $5.52 1/4 per bushel.

For the past week, Chicago March corn futures increased by 2 cents to close at $4.42 per bushel.

Throughout the past week, January soybean futures in Chicago decreased by 5 1/2 cents to close at $9.88 1/4 per bushel.

Accumulated US export sales for the week ending December 05.

*Source: USDA

Weather:

During the past week, the weather in the United States was cold with light precipitation. In Western Europe, there were showers but still positive temperatures. The Balkans experienced moderate rainfall. In Ukraine and Russia, the weather was mostly dry, with cold conditions in Russia. In eastern parts of Australia, the rainfall continues. In Brazil, heavy rains occurred, particularly in the south, where flooding was reported. In Argentina, there were moderate rains in some areas.

Over the next 10 days, temperatures in the US Corn Belt will be low, with moderate snowfall. In the US Wheat Belt, the weather will be warm with light precipitation. In Western Europe, temperatures will remain mostly positive, accompanied by rain. In the Balkans, positive temperatures and rain are expected. In Ukraine, positive temperatures and light precipitation are forecasted. In Russia, there will be significant rainfall in the south and snow in the central region, with temperatures dropping to as low as -20 degrees. In India, moderate temperatures without precipitation are anticipated. In China, the weather will be cold and dry. In Indonesia and Malaysia, rainfall will persist. In Australia, hot and dry conditions will dominate the west and south, while the east will experience moderate temperatures with gradually diminishing rainfall. In Brazil, the rains will continue. In Argentina, moderate rains are expected in the north and central regions, with light rains in the south. Overall, concerns for crops are evident in Russia due to the cold and dry weather so far. In other major production areas around the world, conditions remain favorable. While the rainfall in Argentina is not entirely sufficient, the crops are currently in good condition.

GRAIN EXPORTS:

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

Wheat exports from the United States were weak, while corn and soybean exports remained strong. Weekly export sales for all three crops declined but stayed at a solid level. Wheat exports from Russia dropped to 800,000 tons for the week, and Ukraine's exports plummeted.

During the week, USDA released its December report. Key highlights from the report include:

USDA  -  December 2024

Wheat USDA – The wheat production in the EU is projected at 121.3 million tons (122.6 in November and 135.10 in 2023/24). Exports from Russia are expected at 47 million tons (48 and 55.5), exports from the EU are expected at 29 million tons (30 and 37.95), and exports from Ukraine are projected at 16.5 million tons (16 and 18.58).

Corn USDA – The corn production in Mexico is forecast at 23.7 million tons (24.5 and 23.5). Consumption in Brazil is projected at 85.5 million tons (83.5 and 84), consumption in the EU is expected at 75.7 million tons (75.1 and 78.1), and at 322.98 million tons in the United States (321.71 and 322.00). Ending stocks in the United States are expected at 204.27 million tons (206.27 and 211.29). US exports are forecasted at 62.50 million tons (59 and 59.35), while Brazil is expected to export 46 million tons (48.5 and 46.47). Mexico's corn imports are projected at 24.5 million tons (24 and 24.76), the EU at 19.5 million tons (19 and 19.79), China at 14 million tons (16 and 23.41), and Iran at 8.1 million tons (7.6 and 8.5).

Soybean USDA – The soybean production in Argentina is projected to reach 52 million tons (51 and 48.21).

Overall, the most significant changes are observed in the corn balance. China has significantly reduced its corn imports, which will impact the global balance in the coming years.

Wheat – On Friday, wheat futures fell in Chicago but rose in Paris. Rainfall is expected in parts of the US Wheat Belt next week, although most areas will remain dry. USDA kept its Australian wheat production forecast unchanged at 32 million tons. However, other analysts suggest that following heavy rains, 3–4 million tons of the production will be downgraded to feed quality, significantly above normal levels. The wheat production in Western Australia is expected to be the third largest at 10.83 million tons, where moderate rainfall caused minimal damage. In Russia, export taxes remain high, though a reduction is expected next week. Demand for Russian wheat is declining. Saudi Arabia is seeking to purchase 595,000 tons of wheat. In India, authorities once again reduced storage limits for wheat held by traders and processors to push more wheat onto the market and curb price increases. Importing remains an option, but the preference is to rely on domestic production rather than cheap foreign grain. Despite high prices, production in India is not increasing in line with demand. India appears to be underperforming in terms of production capacity and will likely require imports in the coming months or years.

Corn – On Friday, corn futures fell in both Chicago and Paris. US export data and export commitments for corn are significantly higher than last year. Despite the large US corn production, prices are stable because USDA projects ending stocks to be at 2023/24 levels. Reduced corn demand from China is being offset by increased demand from other countries, while strong US exports are supported by limited supply from Brazil and Ukraine. In Argentina, corn planting has been completed on 55.6% of the areas, above the average level, according to the Buenos Aires Grain Exchange. Excellent rainfall in Argentina last week is expected to maintain good crop conditions for both corn and soybeans for at least another 15 days. According to Ukraine's Ministry of Agrarian Policy, the country has a grain export potential of 40.3 million tons, including 20.5 million tons of corn and 16.2 million tons of wheat.

Soybeans – On Friday, soybean complex prices fell in Chicago, rapeseed futures rose in Paris, while canola futures fell in Canada. USDA reported a private export sale of 200,000 tons of soybeans to an unknown destination. U.S. soybean export data is significantly above last year’s levels. November soybean processing in the United States is expected to reach 5.35 million tons. According to the Buenos Aires Grain Exchange, soybean planting in Argentina has been completed on 64.7% of planned areas, aligning with the average level. Continued rainfall in Malaysia is expected to reduce palm oil production by 10–20%, supporting the oilseed market. South Korea purchased 50,000 tons of non-GMO soybeans.

The price of soybeans FOB Nola is 400 USD/ton, while the FOB Brazil price is 430 USD/ton. Freight costs for United States soybeans are only 4 USD/ton higher to Asian markets. U.S. corn is also cheaper than Brazilian corn and faces fewer logistical challenges. Weather in Brazil is excellent, making it surprising that Conab only raised its soybean production forecast by 0.1 million tons to 166.2 million tons. Corn production estimate was lowered by 0.2 million tons to 119.6 million tons, compared to USDA's massive 127 million-ton estimate. The large discrepancy, similar to 2023/24, will be closely monitored by the markets.

The past week seemed to fly by with global holiday celebrations. Over the week, the U.S. dollar index continued to strengthen, acting as a headwind for commodity markets. A greater-than-expected 0.25% interest rate cut in the United States next week will be needed to counterbalance rising global tensions impacting the dollar. For now, the U.S. dollar remains a secure choice despite discussions about its declining dominance. The Dow Jones ended the week with seven consecutive losing sessions, marking its longest losing streak since 2020, a reminder of how robust stock markets have been since the COVID era.

Global oil demand remains weak. OPEC+ has maintained production cuts through early 2025. Assad's regime in Syria is now considered a thing of the past, and yet oil prices are significantly rising. China announced a new round of economic stimulus measures, boosting market sentiment. However, the Chinese economy remains weak. The new US administration is expected to maintain tensions with China, further deepening uncertainty in Asia. Despite the strong dollar, the US economy is currently very competitive.

Everyone is preparing for the holidays. In just a few days, they begin, and trade activity takes a backseat. We close the year filled with tension, ongoing military conflicts, and geopolitical strife.

Changes in FOB prices of major exporters in recent days:

Wheat – FOB wheat prices increased, except in France. The FOB price of Bulgarian wheat is 239 USD/ton (+3 USD/ton for the week and -3 USD/ton the previous week). The FOB price of Australian milling wheat is 238 USD/ton (unchanged for the week and -2 USD/ton the previous week), Australian wheat with 10% protein is priced at 231 USD/ton (+1 USD/ton for the week and -2 USD/ton the previous week), and the FOB price of Australian feed wheat is 200 USD/ton (201 USD/ton the previous week).

Corn – FOB corn prices increased. During the week, the FOB price of Brazilian corn rose by 1 USD/ton to 209 USD/ton (+1 USD/ton the previous week). The FOB price of US corn remains the lowest on the market.

Soybeans – FOB soybean prices decreased in the United States and Argentina but rose significantly for Brazil. The FOB price of Brazilian soy increased by 16 USD/ton (-29 USD/ton the previous week) to 396 USD/ton.

During the past week, oil prices showed mixed movements.

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