Commodity snapshot

The release of the USDA’s first WASDE report of 2025 on Jan-10, which saw the department cut its estimates for US corn and soybean production in 2024, prompted a spate of bullish price action across the G&O complex, lifting prices to multi-month highs – a rising tide carries all boats, with active wheat contracts also making gains. Markets have since started to settle and short-term upside appears to be constrained. The S&P GSCI Agriculture Index gained 2.8% WOW, while the US Dollar Index (DXY) was flat.

The inauguration of President-elect Trump on Jan-20 could well mark a watershed moment for agricultural commodities markets. Soybeans were at the centre of US-China trade tensions during Trump 1.0 and, while China has taken steps to reduce its reliance on US exports in the interim, the humble bean could well find itself the subject of renewed trade hostilities. US imports of Chinese UCO appear vulnerable to an initial Trump salvo, despite Jan-10 guidance from the Biden administration that excluded imported UCO from the 45Z Tax Credit (still enjoyed by other veg oils).

In the context of tariff threats, considering how biodiesel feedstock supplies in the US, which include domestic soybean oil as well as imports of canola, tallow, and UCO, might evolve post-inauguration points to a broader potential outcome of Trump 2.0 with significant market implications, that US agriculture becomes more insular. Soybean oil led price increases between Jan-08 and Jan-15, climbing 11.3% WOW.