Profit-Taking and Tariff Concerns: Corn futures ended the week lower, with March corn closing at $4.82, down 8¼¢. The market saw profit-taking at month-end, and concerns over potential 25% U.S. tariffs on Mexico and Canada weighed on prices. These tariffs could impact U.S. corn exports to key markets.

Record Open Interest: Corn open interest reached a record 2,000,000 contracts, up 650,000 contracts since August 2024. This surge was driven by increased technical buying and farmer selling, indicating heightened market activity.

Weather Impact in Argentina: Dry and hot conditions in Argentina have lowered crop ratings, with potential rains next week offering some resistance to further price declines. However, the damage from prolonged dryness may limit any significant recovery.

Ethanol Demand: Ethanol production remains strong, with USDA raising its corn-for-ethanol forecast to 5.545 billion bushels. However, break-even margins for ethanol producers could lead to reduced run rates, potentially adding to ending stocks.

Export Performance: U.S. corn exports have been robust, with year-to-date sales up nearly 30% compared to last year. However, the potential for reduced shipments to Mexico and Canada due to tariffs could weigh on future demand.

Brazilian Harvest Delays: Soybean futures closed lower, with March soybeans ending at $10.42, down 2¢. The slow start to Brazil’s soybean harvest, coupled with heavy rains in central Brazil, has raised concerns about quality and transportation delays.

Argentina’s Dry Conditions: Argentina continues to face dry weather, with crop conditions deteriorating. Forecasts for rain in February could halt further declines, but the damage to soybean yields may already be significant.

Strong Crush Margins: U.S. soybean crush margins remain strong, with December crush estimated at a record 217.6 million bushels. Higher soyoil prices, supported by potential reductions in Canadian canola oil exports, have boosted crush profitability.

Export Sales Decline: U.S. soybean export sales fell to 443,000 tons, down from 1.493 million tons the previous week. China remains the top buyer, but overall demand has softened amid competition from South America.

Tariff Concerns: Like corn, soybeans face potential headwinds from U.S. tariffs on Mexico and Canada. Mexico, a key buyer of U.S. soybeans and soymeal, could shift sourcing to South America if tariffs are implemented.

Weekly Gains Despite Daily Losses: Wheat prices ended the week higher, with March CBOT wheat closing at $5.59½, down 7¢ for the day but up for the week. Support came from global demand and concerns over dry conditions in key growing regions.

Northern Hemisphere Weather: Weather in the Northern Hemisphere remains a key focus, with dry conditions in parts of the U.S. Plains and Black Sea region raising concerns about winter wheat conditions. Any significant cold snap could further stress crops.

Black Sea Concerns: Wheat in the Black Sea region, particularly in southwestern Russia, is in poor condition due to inadequate soil moisture. A system moving through next week could bring some relief, but more rain is needed before spring.

Export Competition: Russia’s wheat exports are expected to drop sharply this season due to limited supplies and low profitability. This could tighten global wheat supplies and provide support to prices.

U.S. Dollar Impact: A stronger U.S. dollar has offered some resistance to wheat prices, making U.S. exports less competitive on the global market. However, strong demand from countries like the Philippines has helped offset this pressure.