Agricultural Commodities Struggle

Wheat

Wheat Prices Fell on Appreciated Dollar

• Wheat futures slipped below $5.4 per bushel, marking a 10-week low as the US dollar surged to its strongest level since May, while rain in US cropping areas improved the supply outlook.
• The USDA reported that 44% of US winter wheat is rated good to excellent, a 3-point improvement following recent rains.
• Meanwhile, the latest USDA report showed modest changes, with US imports rising by 5 million bushels and food use increasing by 2 million bushels, resulting in a slight increase in US ending stocks.
• In contrast, Russia, the world’s leading wheat exporter, has shipped grain at near-record levels despite low prices and domestic restrictions, reaching 45% of its estimated 60 million-ton export capacity this season.

Speculators Anticipate Big Upside Move Amid Lower Supply

• Corn futures held around $4.30 per bushel, close to the one-month high of $4.31 seen November 8th, amid expectations of reduced supplies in the US.
• The USDA’s November WASDE report lowered US corn yield to 183.1 bushels per acre, down from October’s 183.8 bushels, reducing total production by 60 million bushels to 15.143 billion for the 2024/25 marketing year.
• Although the USDA also reduced its ending stocks forecast for 2024/25 to 1.9 billion bushels, the stocks remain relatively comfortable compared to historical levels.
• Furthermore, the global supply situation is tightening, with reduced production forecasts for major producers, such as Brazil and Ukraine, adding to upward pressure on prices.

January Soybeans Below $10 mark, Pressured by Lower Chinese Demand

• Soybeans futures fell below $10 per bushel from a one-month high of $10.3, on expectations of lower demand amid unfavorable environment for biofuel industry under new Trump administration.
• Additionally, China, the world’s top soybean importer, is expected to cut its imports by 9.5% for the marketing year ending September 2025, lowering demand from 109.4 million metric tons to 98.8 million tons.
• Chinese buyers have been stockpiling ahead of the US election, anticipating that trade tensions with the US may worsen under Trump’s return.
• Meanwhile, Russian wheat exports have also slowed, as demand remains weak and a new export regulation is introduced to curb domestic price hikes.