By Joe Hoppe

A roundup of key agricultural commodity markets for the week of Feb.18-21 by Dow Jones Newswires in Barcelona.

GRAINS & OILSEEDS: The macro mood is bullish on a weaker U.S. dollar, stronger commodity currencies and risk-on investor attitude toward equities.

The greenback weakened against a raft of commodity currencies, including the Brazilian real and Chinese yuan, making it cheaper for international investors to purchase dollar-denominated commodities like agriculturals. Investors had shrugged off strong inflation prints and instead homed in on a significant drop in U.S. retail sales data on Friday.

Bond markets have now priced in more Federal Reserve interest rate cuts, softening the dollar, boosting risk assets and commodity prices and encouraging funds to cover shorts and add new long positions, Peak Trading analysts said in a note.

There is little economic or central banks data expected in the holiday-shortened week, other than Fed minutes on Wednesday. The minutes aren't expected to shift expectations, given that Fed Chair Jerome Powell spoke just one week ago, with tariff uncertainty instead expected to be the main driver of any volatility, Peak Trading said.

South American weather looks near perfect for soybean harvesting, with warm and dry weather in central and northern Brazil. Regular rains are set to resume next weekend, which will be good for corn early growth stages. Argentina has received some needed rains, which should limit production losses.

There is cold weather ahead for central and southern Russia and U.S. Plains states this week, with little snow cover to protect wheat crops against sub-zero temperatures. This could lead to significant winterkill damage, lower production and tighter global wheat stocks.

Chicago wheat futures are down 0.5% at $5.97 a bushel on Tuesday, while corn is up 0.4% on $4.98 a bushel. Soybean prices are up 0.1% at $10.37 a bushel.

SOFT COMMODITIES: Agricultural softs have had a mixed performance over the past week, with cocoa and cotton seeing some gains, and coffee and sugar sliding.

Arabica coffee prices have slid 2.9% on-week after hitting a record level on Feb. 11, and has more than doubled on-year. Cocoa is up 1% on-week and has risen nearly 95% on-year.

Despite some volatility from low trading volumes, persistent production challenges are generally exerting upward pressure on global soft commodity prices, BMI analysts said in a note. Adverse weather conditions in Brazil continue to drive coffee prices higher, while similar production issues in major sugar-producing countries like Brazil and India are propping up sugar prices.

While grain prices face downside risks from escalating trade tensions--primarily due to the threat of President Trump's retaliatory tariffs hitting U.S. exports--soft commodity prices have been bolstered by the uncertainty, BMI said. The U.S. has a substantial dependency on import volumes for commodities like cocoa and coffee, and increased uncertainty over potential further tariffs have reinforced price support, BMI added.

On Tuesday, cocoa is up 0.6% at $10,385 a metric ton, while coffee is down 1.7% at $4.01 a pound. Sugar is up 0.4% at $0.19 a pound.

Write to Joe Hoppe at joseph.hoppe@wsj.com

(END) Dow Jones Newswires

February 18, 2025 10:51 ET (15:51 GMT)

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