By Joe Hoppe

A roundup of key agricultural commodity markets for the week Feb. 3-7 by Dow Jones Newswires in Barcelona.

GRAINS & OILSEEDS: The macroeconomic mood is mixed as the U.S. dollar rose on the Trump administration's proposed tariffs, with uncertainty and volatility expected ahead.

The U.S. dollar surged Monday after the U.S. said it will impose a 25% tariff on goods from Mexico and Canada, with a reduced 10% tariff on Canadian energy, and an additional 10% tariff on goods from China. Canada has already pledged to retaliate, while Mexican President Claudia Sheinbaum said Monday evening that Trump has agreed to hold tariffs on Mexico for a month, reversing grains losses seen earlier in the session.

The stronger dollar will make it less attractive for international buyers to purchase dollar-denominated commodities.

The tariff situation remains fluid, though it is broadly bearish for U.S. grain and soy markets. It could however support U.S. bean oil, given fewer Canadian canola imports, and U.S. high-protein wheat, Peak Trading analysts said in a note.

As well as tariff uncertainty, market focus will be on U.S. economic data this week. The Nonfarm Payroll jobs data print on Friday will be a particularly key--a strong jobs print on Friday would likely drive the dollar even higher against other key commodity currencies like the Chinese yuan and the Brazilian real.

On the weather front, Argentina and Brazil are experiencing hot and dry conditions with only scattered light rains expected this week. Northern Brazil remains wet through Tuesday before turning drier, though harvests are behind schedule, driving concerns over corn planting, Peak Trading says.

Chicago wheat futures are up 1.8% at $5.70 a bushel on Monday, while corn is up 1.4% at $4.89 a bushel. Soybean prices are up 1.3% at $10.56 a bushel.

SOFT COMMODITIES: Agricultural softs have had a mixed performance over the past week, with arabica coffee recording a string of record highs but cocoa, cotton and orange juice seeing losses.

Arabica coffee prices hit a record level earlier in the session, as traders factor in a decline in prospects of arabica in Brazil and a recovering Brazilian real, Rabobank analysts said in a note. Arabica set a fresh record of $3.89 earlier in the session, exceeding the prior record of $3.81 set on Friday.

Arabica prices accelerated in late 2024, when adverse Brazilian weather prior to October hit harvest expectations. Coffee futures began hitting records on Jan. 27, over a now resolved trade dispute between the U.S. and Colombia. While the tariff spat is over, it shows South America is still on Trump's radar, Rabobank said.

Cocoa prices also increased in thin trading on Monday. The crop is down on-month but remains up more than double on year due to supply-side concerns, BMI analysts said in a note.

On Monday, cocoa is up 0.6% at $10,916 a metric ton, while coffee is up 0.9% at $3.81 a pound. Sugar is down 0.5% at $0.19 a pound.

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

(END) Dow Jones Newswires

February 03, 2025 12:16 ET (17:16 GMT)

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