The currency pair EUR/USD declined to 1.0300. The price of US WTI light crude oil fell to 72.32 USD per barrel.

Wheat futures declined on Monday, with Chicago Board of Trade (CBOT) March wheat closing at $5.9½ per bushel, down 3 cents for the session. The decline followed a broader trend of weakening demand, as major wheat-importing countries—including China, Indonesia, and Egypt—have scaled back purchases due to economic challenges and increased local cereal production. Traders had initially expected tight global wheat stockpiles to provide price support, but the reduction in demand has taken precedence. Additionally, China’s recent decision to delay or redirect 600,000 metric tons of wheat imports, mainly from Australia, has added further pressure on the market.

Corn futures also closed lower, with CBOT March corn ending the day at $4.91½ per bushel, an increase of 4 cents. While prices had gained 5½ cents over the past week, there was price pressure on Monday came from expectations of record maize production in the United States and Argentina, which has fueled a 25% decline in corn prices over the past year. Despite these bearish factors, fund activity remains strong, with net long positions in CBOT corn climbing to 364,217 contracts, the highest since April 2022. Additionally, continued ethanol demand has provided some stability, though potential changes in U.S. biofuel policy could impact long-term corn consumption.

Soybeans extended their decline on Monday, with CBOT March soybeans closing at $10.49½ per bushel for the day. The broader soybean market continues to grapple with expanding production in Brazil and Argentina, which has driven a 23% decline in soybean prices since early 2024. The global surplus remains a key concern, with analysts pointing to rising Brazilian export volumes and expectations of continued high yields in South America. Meanwhile, uncertainty surrounding U.S. biofuel policy and international trade tensions has added to the bearish sentiment.

Global grain prices are forecasted to decline by 5% in 2025, driven largely by increased production in key exporting regions. The Food and Agriculture Organization (FAO) reported that global food commodity prices fell in January, with cereals seeing a modest 0.3% increase, primarily due to rising maize prices. Wheat and rice prices, however, remained under pressure. Additionally, a stronger U.S. dollar has made American agricultural exports less competitive, particularly affecting wheat and corn sales in key international markets.

Beyond individual grain contracts, broader global movements continue to shape the market. One of the most significant developments is the declining demand for wheat imports from major global buyers, including China, Indonesia, and Egypt. Weaker demand, combined with a rising global wheat stockpile, is shifting expectations for future pricing, despite recent volatility in wheat markets. China’s move to delay or redirect large wheat imports from Australia has further dampened demand, raising questions about how the country’s shifting trade strategy will impact global grain flows in the months ahead.

Declining Global Wheat Import Demand:
Major wheat-importing nations China, Indonesia, and Egypt are reducing purchases due to economic difficulties and higher local cereal production. A stronger U.S. dollar is further dampening demand, making U.S. wheat less competitive globally.

China’s Delayed Wheat Imports:
China has delayed or redirected 600,000 metric tons of wheat imports, primarily from Australia, due to ample domestic supply. This unexpected shift has pressured wheat markets and raised questions about China’s future import needs.

Global Grain Prices Expected to Drop 5% in 2025:
Driven by record production in key exporting nations, analysts predict a 5% decline in global grain prices this year. The largest price drops have been seen in maize (25%) and soybeans (23%), with wheat showing more resilience due to tight stockpiles.

U.S. Corn Futures See Strong Fund Activity:
Money managers have increased their net long positions in CBOT corn futures and options to 364,217 contracts—the highest since April 2022. This reflects bullish sentiment, though analysts warn that much of the move was driven by short covering rather than new fundamental strength.

FAO Reports Lower Global Food Prices in January:
The FAO’s latest report highlighted a decline in global food commodity prices, primarily led by sugar and vegetable oils. However, cereal prices edged up 0.3%, with rising maize prices offsetting declines in wheat and rice.

Archer Daniels Midland (ADM) Faces Tough 2025 Outlook:
ADM, a major U.S. grain trader, posted its weakest Q4 profit in six years, citing trade tensions and uncertainty around U.S. biofuel policies. The company expects a third straight annual earnings decline, adding another layer of uncertainty to the grain sector.

U.S. Ethanol Demand Remains Firm:
Despite volatile grain prices, ethanol production continues to support U.S. corn demand. However, potential shifts in U.S. biofuel policy could impact long-term demand.

Maize Surplus Weighing on Prices:
The market continues to grapple with record maize production levels, particularly in Argentina and the United States, which have contributed to a sharp 25% decline in prices.

Soybean Prices Decline Due to Expanding Supply:
With Brazil and Argentina increasing production, soybean prices have been under pressure. The 23% decline in soybean prices in 2024 reflects the impact of these expanding supply levels.

Impact of a Stronger U.S. Dollar on Global Trade:
A strengthening U.S. dollar is making American agricultural exports less competitive on the global stage, particularly affecting wheat and corn sales. This trend has been one of the factors limiting U.S. export momentum despite strong overall demand.