The EUR/USD currency pair fell to 1.0299, while the price of US WTI crude oil rose to $73.92 per barrel.

Oil prices increased on Thursday despite a significant rise in fuel inventories in the United States, the world's largest consumer of crude oil. Gasoline inventories grew by 6.3 million barrels last week to 237.7 million barrels, according to the U.S. Energy Information Administration. However, crude oil stocks decreased by 959,000 barrels during the same week, compared to analysts' forecasts of a 184,000-barrel decline. JPMorgan analysts expect global oil demand in January to rise by 1.4 million barrels per day, reaching 101.4 million barrels per day, primarily due to "increased fuel use for heating in the Northern Hemisphere."

Yesterday, March wheat futures in Chicago fell by 2 1/4 cents to $5.34 1/4 per bushel. Wheat futures in both Chicago and Paris declined. For the week ending January 2, 2025, US wheat export sales are expected to range between 150,000 and 500,000 tons. Today, the USDA will release its January report. U.S. wheat stocks as of December 1, 2024, are expected to reach 42.6 million tons (+3.9 compared to the previous year). U.S. ending wheat stocks are projected to grow slightly to 21.7 million tons. Global wheat ending stocks are forecasted at 257.86 million tons, nearly unchanged from December. Taiwan purchased 114,000 tons of wheat from the U.S. India's wheat production is expected to be strong at 112.7 million tons. However, will this be sufficient to address the high domestic prices? Likely not, as a 5-million-ton increase will not cover the reductions in the market over the past three years, nor meet the rising demand in the upcoming season.

Yesterday, March corn futures in Chicago rose by 2 cents to $4.56 per bushel. Corn futures increased in Chicago but remained stable in Paris. Weekly US corn export sales are expected to be between 0.7 and 1.4 million tons of the old crop, with an additional 0–100,000 tons of the new corn crop. U.S. corn stocks as of December 1, 2024, are projected at 308.5 million tons, 0.6 million tons less than last year. Brazil’s corn production is expected to remain unchanged at 127 million tons, while Argentina’s production might drop by 0.5 million tons to 50.5 million tons. South Korean importers have purchased 65,000 tons of corn from either the United States or South America. Algeria is likely to have rejected all bids for 240,000 tons of feed corn.

Yesterday, March soybean futures in Chicago rose by 4 1/2 cents to $9.99 per bushel. Soybean and soyoil futures increased in Chicago, while soymeal futures dropped. Rapeseed futures rose in Paris, whereas canola futures fell in Canada. U.S. weekly soybean export sales are expected to range between 0.4 and 1.3 million tons of the old crop, with an additional 0–100,000 tons of the new crop. Soymeal sales are projected at 150,000–400,000 tons, and soyoil sales at 20,000–60,000 tons. Rainfall is expected in Brazil and Argentina by January 25, 2025. U.S. soybean stocks as of December 1, 2024, are forecasted at 87.9 million tons (+6.3). Brazil’s soybean production estimate by the USDA may rise by 1.28 million tons to 170.28 million tons, while Argentina’s might decrease slightly to 51.91 million tons. Global ending soybean stocks are projected at 132.2 million tons (+0.33). The soybean harvesting campaign in Mato Grosso, Brazil, has started late. Despite potential for record production, insufficient sunlight during early growth and current rainfall could limit yields. Nevertheless, the production is expected to be excellent.

The resumption of the U.S.–China trade war might have a smaller impact on the Chinese market compared to seven years ago. There is a possibility that U.S. soybeans might not reach China. Between 2021/22 and 2023/24, China increased its soybean reserves to 20 million tons. The soymeal content in feed formulas dropped from 17.3% in 2019 to 13% in 2023. In 2023/24, Brazilian soybeans accounted for 74% of China’s soybean imports. In the event of a new trade war, this share could rise to 80%. After overcoming COVID waves and African swine fever, Chinese authorities have emphasized the use of food waste in feed production. While nutritionally weaker, food waste displaces some grain and soymeal demand. China’s swine herd is recovering slowly, under government control, with regulated growth and meat prices. Despite China’s population size, meat consumption has an upper limit, and growth is slowing. India has a large population but low consumption due to poverty.

This time, markets are calm ahead of the USDA's January report. Trends are clear—good U.S. sales and currently excellent prospects for Brazilian and Argentine productions. However, global politics remain uncertain. This month, the new U.S. president will take office. Changes are expected, and there will be many. Yet, rational minds indicate that the situation will not be the same as seven years ago but much more measured and agreement-based.