Over the past week, the EUR/USD currency pair declined by 0.0035 to 1.0328.

The price of US WTI light crude oil fell by $1.53 per barrel to $71.00 per barrel.

For the past week, March SRW wheat futures in Chicago rose by 23 1/4 cents to close at $5.82 3/4 per bushel.

Over the previous week, CBOT March corn futures increased by 5 1/2 cents to close at $4.87 1/2 per bushel.

Throughout the past week, Chicago March soybean futures gained 7 1/2 cents to close at $10.49 1/2 per bushel.

Accumulated US export sales for the week ending January 30.

*Source: USDA

Weather and Supply Chain Risks

• U.S.: Mixed winter wheat conditions, with improvements in Kansas but worsening in Oklahoma and Texas.
• South America: Argentina’s drought worsens, impacting corn and soybean crops; Brazil’s soybean harvest remains slow, and second-crop corn planting faces delays.
• Australia: Dry weather raises concerns over sorghum and cotton yields.
• Supply Chain: A fire at Brazil’s Mato Grosso grain transshipment hub disrupts logistics, delaying soybean exports. Low water levels in key U.S. river transport routes may impact grain shipments in the coming months.

GRAIN EXPORTS:

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

Key Market Developments

The global grain and oilseed markets experienced significant volatility this week, driven by geopolitical tensions, trade disruptions, and evolving weather conditions across key growing regions.

Soybean prices faced downward pressure as China imposed tariffs on U.S. energy and agricultural equipment in response to President Donald Trump’s 10% levy on Chinese imports. The trade tensions revived concerns about reduced U.S. agricultural exports, echoing the decline in U.S. soybean shipments to China during the 2018 tariff war.

The USDA’s latest export inspections report for the week ending January 30 showed mixed trends. Corn inspections reached 1.252 million tons, while soybeans totaled 1.013 million tons, up from 738,000 tons the previous week but still trailing last year’s levels. Wheat inspections stood at 253,000 tons, reflecting weaker global demand.

The U.S. soybean crush reached a record 217.7 million bushels in December, up 6.6% year-over-year, driven by strong domestic meal and oil demand. However, U.S. corn used for ethanol declined by 2.3% to 473.2 million bushels, with distillers’ dried grains with solubles (DDGS) output falling to 1.876 million tons. The slowdown in ethanol demand could weigh on corn prices in the coming months.

Brazil’s soybean harvest progress lagged, reaching only 9% as of January 30, compared to 16% a year earlier. Mato Grosso showed improvement, but Rio Grande do Sul remained dry. Celeres increased its 2024/25 soybean crop estimate to 174 million metric tons, while StoneX lowered its forecast to 170.9 million tons due to dry weather concerns.

Russian wheat exports are expected to decline sharply in February, with shipments projected to halve year-over-year due to reduced profitability and shrinking supplies. SovEcon adjusted its Russian wheat export forecast for 2024/25 to 42.8 million tons, while Ukraine’s wheat export estimate was cut to 16 million tons.

Weather factors continue to influence global grain markets. U.S. winter wheat conditions improved in Kansas but worsened in Oklahoma and Texas. South America’s drought-stricken conditions are impacting Argentina’s corn and soybean crops, while dry conditions in Australia are raising concerns over sorghum and cotton yields.

China’s expanded corn stockpiling efforts in its northeastern provinces could reduce demand for imported corn, potentially impacting global trade flows. Meanwhile, the European Union maintained its 2024/25 grain production forecast at 255.8 million tons, with expectations for steady wheat, barley, and corn output.

India’s palm oil imports dropped to an 11-year low in January, declining over 50% to 242,000 tons due to an unusual price premium over soybean oil. This shift could support demand for soybean and sunflower oil in global markets.

New U.S. tariffs on Canada, China, and Mexico are expected to disrupt agricultural trade. The U.S. imposed a 25% tariff on select Canadian and Mexican goods and a 10% additional levy on Chinese imports, raising fears of retaliation that could impact agricultural exports and commodity pricing.

A fire at a key grain transshipment hub in Brazil’s Mato Grosso region delayed soybean shipments, compounding logistical challenges as harvest progress remained slow. Meanwhile, new U.S. tariffs on Canadian potash may increase fertilizer costs for American farmers, impacting planting decisions and grain production margins.

Changes in FOB prices of major exporters in recent days:

Crop Market Breakdown

Wheat

• Russian wheat exports projected to halve in February due to shrinking supplies and lower profitability.
• SovEcon cut its Russian wheat export estimate for 2024/25 to 42.8 million tons.
• U.S. winter wheat conditions improved in Kansas but deteriorated in Oklahoma and Texas.
• Tunisia and Jordan continued wheat purchases, supporting global demand.

FOB wheat prices increased for the third consecutive week. The FOB price of Bulgarian wheat is 244 USD/ton (+3 USD/ton for the week and +3 USD/ton from the week before). The FOB price of Australian milling wheat is 233 USD/ton (+6 for the week and -5 from the previous week), wheat with 10% protein is priced at 228 USD/ton (+6 during the week and -3 from the week before), while Australian feed wheat is at 200 USD/ton (195 the week before). Australian wheat prices have risen again following a correction from last week.

Corn

• U.S. export inspections totaled 1.252 million tons for the week, with Mexico as the top buyer.
• China’s aggressive stockpiling in its northeastern provinces could reduce its reliance on imports from the U.S. and Brazil.
• Brazil’s second corn crop (safrinha) planting is delayed due to dry conditions, raising concerns over total production.

FOB corn prices remained mostly unchanged. During the week, the FOB price of Brazilian corn increased by 2 USD/ton to 232 USD/ton (+24 from the week before).

Soybeans

• Soybean prices fell amid renewed U.S.-China trade tensions following China’s retaliatory tariffs.
• Brazil’s soybean harvest stood at 9% as of January 30, significantly behind last year’s pace.
• Celeres raised Brazil’s 2024/25 soybean crop estimate to 174 million metric tons, while StoneX lowered its estimate to 170.9 million tons due to weather concerns.
• Argentina’s soybean crop is struggling with worsening drought conditions, threatening final yields.

FOB soybean prices in the U.S. decreased, while prices in Brazil and Argentina increased. The price of Brazilian soybeans rose by 12 USD/ton (-6 from the week before) to 388 USD/ton. The price difference between U.S. soybeans and Brazilian soybeans sharply narrowed to 25 USD/ton from 41 USD/ton the week before.

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

Geopolitical and Trade Developments

• The U.S.-China trade dispute reignited, with China imposing tariffs on U.S. goods, including agricultural equipment, which could hurt U.S. grain exports.
• Brazil and China deepened trade ties, with COFCO securing agreements for Brazilian soybean shipments, potentially shifting global trade flows.
• The U.S. imposed fresh tariffs on Canada, Mexico, and China, raising fears of agricultural trade disruptions and retaliatory measures.

Outlook for the Week Ahead

• Soybeans: Market sentiment will remain focused on Brazil’s harvest pace, Argentina’s drought, and U.S.-China trade developments.
• Corn: U.S. export trends, China’s stockpiling efforts, and Brazil’s second-crop planting delays will be key factors.
• Wheat: Russian and Ukrainian export forecasts, U.S. winter wheat conditions, and global demand from buyers like Tunisia and Jordan will influence price movements.
• Geopolitics: Trade relations, particularly between the U.S. and China, will play a crucial role in price direction.

Market participants will closely monitor weather developments, trade policy shifts, and logistical challenges as they navigate an increasingly complex grain and oilseed landscape.