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A strengthening U.S. dollar got part of the blame for a flat performance for soybeans and weekly losses for corn and wheat futures over the past week. Here’s a look at what’s at play.
The ICE U.S. Dollar Index, a measure of the currency against a basket of six major rivals, rose 0.9% this week, hitting its highest since May. A stronger dollar can be a negative for commodities priced in the currency, making them more expensive to users of other currencies.
The dollar, however, has largely lost ground to major rivals in 2025, with the index down 7.7% for the year to date. That dollar weakness has helped farmers in 2025, aiding robust corn exports and providing a cushion for sales of other commodities.
The greenback’s recent strength was accompanied by fading expectations the Federal Reserve will deliver another rate cut in December. Fed Chair Jerome Powell shook up expectations at the conclusion of the October policy meeting, warning that a December cut was not a foregone conclusion, pointing to diverging views among policymakers amid a “fog” over the state of the economy due to the government shutdown.
The reopening of the government has seen the start of the release of a backlog of data, including a September jobs report that showed stronger-than-expected growth in payrolls. But the figures remain pretty backward looking. At the same time, divisions between Fed members were increasingly on display. As a result, market-based expectations of a December cut continued to fade. Fed-funds futures traders last month had priced in a better than 90% probability of a quarter-point reduction in December, by earlier this week the probability of a cut was seen at less than 40%.
But there’s rarely a dull moment. Remarks by New York Fed President John WIlliams on Friday morning changed the tune. The influential policymaker, who is a permanent voting member of the rate-setting Federal Open Market Committee and also the committee’s vice-chair, said he saw scope for rates to fall “in the near term.”
Fed-funds futures traders on Friday went back to pricing in a 69.4% probability of a quarter-point cut on Dec. 10.
Fed policy makers, however, still appear divided. And while the stock market ended Friday on a strong note, recent turbulence could serve to provide safe-haven support for the greenback. The dollar is rarely the primary driver of the grain market, but it’s worth watching for its influence at the margin.
Industry, farmers on collision course over water resources in Ohio: study
A data-center building boom and increased irrigation demand could set the stage for a showdown between agriculture and industry over water in Ohio, the Associated Press reported Friday, citing a study.
Competing demand by agriculture and industry, particularly the 130 data centers in central Ohio that consume millions of gallons of water a day to cool computer equipment, would require billions of gallons of water daily, the report said, citing a 15-county Central Ohio Regional Water Study released this year by the Ohio Environmental Protection Agency.
Industrial demand across the region is expected to rise by 120% between 2021 and 2050, to 25 million gallons a day, the report said, while agricultural demands could hit an estimated 110 million gallons a day by 2040 during the growing season.