The EUR/USD currency pair decreased to 1.0401. The price of US WTI light crude oil rose to $72.72 per barrel.

The European Central Bank (ECB) has, as expected, lowered interest rates for the fifth consecutive meeting, as inflation nearing the 2% target allows the monetary authority to continue easing restrictions on the economy. Consequently, the interest rates on the deposit facility, main refinancing operations, and marginal lending facility will be reduced to 2.75%, 2.90%, and 3.15%, respectively, effective February 5, 2025. The decision fully aligns with the forecasts of investors and economists. The hope is that monetary policy easing will breathe life into an economy struggling to grow, especially as political upheavals worry consumers and businesses in the region's two largest member states—Germany and France. The disinflation process is underway. Inflation continues to develop largely in line with forecasts and will return to the Governing Council's medium-term target of 2% this year.

Talk of imposing tariffs on U.S. imports from Mexico and Canada prompted traders to start selling and securing profits. However, wheat managed to overcome the tariff news, thanks to reduced exports from Russia, which will likely remain weak at least until the end of the season.

Wheat

Yesterday, March wheat futures in Chicago rose 17 1/4 cents to $5.62 1/2 per bushel. Wheat futures in both Chicago and Paris increased. U.S. President Donald Trump announced a 25% tariff on Mexico and Canada, effective Saturday, with no official countermeasures from either country yet. In 2024, Mexico accounted for 16.56% of total U.S. wheat exports.

For the week ending January 23, 2025, U.S. wheat export sales were 456,086 tons (164,837 tons the previous week, 322,516 tons a year ago), total export commitments reached 18.15 million tons (16.87 million tons a year ago), weekly exports were 588,885 tons (201,316 tons and 267,126 tons in previous periods), and total wheat exports since the start of the season reached 13.35 million tons (10.78 million tons a year ago).

• Japan purchased 89,134 tons of U.S. wheat and 29,070 tons from Canada.
• Tunisia bought 100,000 tons of soft wheat and 100,000 tons of durum wheat, with Bulgaria supplying 50,000 tons of the soft wheat.
• SovEcon revised its forecast for Russian wheat exports this season to 42.8 million tons (down 0.9 million tons from the previous estimate).

Despite declines in corn and soybean prices, wheat prices rose, supported by news of limited Russian exports.

Corn

Yesterday, CBOT March corn futures fell 6 3/4 cents to $4.90 1/4 per bushel. Corn futures declined in Chicago but rose in Paris.

Trump’s announcement of tariffs on Mexico and Canada had a significant impact:

• Mexico is the largest buyer of U.S. corn, having imported 7.93 million tons this season.
• In 2024, ethanol exports from the U.S. to Canada accounted for 35% of total U.S. ethanol exports.

For the week ending January 23, 2025, U.S. corn export sales were 1,358,543 tons (1,660,968 tons the previous week), total export commitments reached 43.29 million tons (33.69 million tons a year ago), weekly exports were 1,320,160 tons (911,350 tons previously), and total corn exports since the start of the season reached 20.93 million tons (16.27 million tons a year ago).

Soybeans

Yesterday, Chicago March soybean futures declined 16 1/2 cents to $10.44 per bushel. The soybean complex in Chicago declined, rapeseed futures in Paris remained directionless, and canola futures in Canada fell.

Trump announced tariffs on Mexico and Canada but did not specify any concrete measures against China, despite suggesting that China would also face some form of tariff.

For the week ending January 23, 2025, U.S. soybean export sales were 438,002 tons (1,491,761 tons the previous week, 164,475 tons a year ago), total export commitments reached 42.68 million tons (38.11 million tons a year ago), weekly exports were 736,201 tons (1,034,583 tons and 949,899 tons in previous periods), and total soybean exports since the start of the season reached 33.00 million tons (27.30 million tons a year ago).

• Soymeal sales were 410,300 tons.
• Soyoil sales were 12,452 tons.

Market Outlook

Beyond U.S. tariff policies, there are few major market-moving developments. Everyone is waiting for further developments, which will likely lead to changes in global trade flows.