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The U.S. dollar saw its biggest annual drop in eight years in 2025; history shows that down years for the greenback often happen in pairs.
That could be welcome news for U.S. farmers in 2026. A weak U.S. dollar was seen providing a tailwind for a robust corn export pace and may have helped cushion the blow from China’s boycott of U.S. soybean purchases last year. A weak dollar is generally seen as a boon for commodities priced in the currency as well as U.S.-made goods as it makes them cheaper to users of other currencies.
The dollar, as measured by the ICE U.S. Dollar Index, which tracks the currency against a basket of six major rivals, fell by 9.4% in 2025, its biggest annual decline since 2017 and second-largest of the last two decades. Strategists at BofA Global Research studied past years when the dollar’s performance most closely resembled 2025. They found that dollar weakness continued into the following year four out of five times.
The average performance of those top five analog years would imply a further 8% downside for the dollar in 2026, said Howard Du, G-10 FX strategist at BofA, in a note on Thursday.
The top five historical analogs for 2026 are 1987, 1995, 2003, 2007 and 2018, Du said, pointing to 1995 as likely the most relevant. That’s because the fundamental backdrop – the economy and the monetary policy backdrop – in 2026 most closely resembles 1995.
“Tech-driven growth allowed the U.S. economy to see a soft landing rather than recession; the Fed proceeded to cut rates in H2 1995 despite inflation running closer to 3% than 2% at the time,” Du wrote. “In 2026, we also expect the U.S. economy to muddle through after a shutdown-driven soft patch in Q4 ’25, and the Fed to further cut rates after midyear.”
The 1995 analog alone would imply 4.2% more downside for the dollar this year, he said, similar to BofA’s forecast for the DXY to fall to a 95-handle in 2026. The dollar has been off to a firm start to begin the new year, trading Thursday at 98.92, up 0.2% on the day and at its highest since Dec.10.
Strength on Thursday came after first-time jobless claims came in weaker than expected, while Challenger, Gray & Christmas said U.S.-based employers announced 35,553 job cuts in December,the lowest since July of 2024.
Corteva, BP team up on biofuels…Corteva Inc. and BP on Wednesday announced the launch of a 50-50 joint venture called Etlas that will produce oil from crops, including canola, mustard and sunflower, for use in the production of biofuels like sustainable (or synthetic) aviation fuel and renewable diesel. In a joint news release, the companies said Etlas would aim to produce 1 million metric tons of feedstock a year by the mid-2030s, which could produce over 800,000 MT of biofuel. They said initial supply is slated to begin in 2027 for use in co-processing at refineries as well as at dedicated biofuels plants.
La Niña packing its bags…The La Niña weather pattern remains in place, but with a 75% chance of a transition to “neutral” conditions between January and March, the National Oceanic and Atmospheric Administration’s Climate Prediction Center said in a Thursday update. If La Niña fades quickly, spring could offer more favorable planting opportunities across key production regions. Drier periods and fewer prolonged storm systems would be favorable for spring planting. 2026 Weather Outlook: La Niña’s Quick Exit, El Niño’s Potential and the Signals Farmers Should Watch
Senate votes to block Venezuela military action without congressional OK…Five Republican senators joined Democrats to vote in favor of a resolution that would bar the Trump administration from further military action in Venezuela without the approval of lawmakers. The vote, less than a week after a U.S. military strike that removed the country’s leader, was procedural but indicates the measure would pass, CNBC reported. It would then go to the House, where Republicans have a thin majority. “Make no mistake, bombing another nation’s capital and removing their leader is an act of war plain and simple. No provision in the Constitution provides such power to the presidency,” said Sen. Rand Paul of Kentucky, who brought the measure along with Democratic Sen. Tim Kaine of Virginia. Trump blasted the Republican lawmakers who voted in favor of the measure. “Republicans should be ashamed of the Senators that just voted with Democrats in attempting to take away our Powers to fight and defend the United States of America,” he wrote on Truth Social.
Brazil egg exports running hot…Brazilian egg exports, including fresh and processed, hit 40,894 MT in 2025 on strong U.S. demand, Reuters reported, citing data from the Brazilian Association of Animal Protein. That’s a rise of 121.4% from 2024, when 18,469 tons were shipped. Egg exporters saw record revenue of $97.2 million last year, the report said, up 147.5% from 2024, the report said.