2024 was full of lessons in the commodity markets. One of the biggest lessons just might be how critical the value of the U.S. dollar can be, according to AgResource Company founder and president Dan Basse. And to start 2025, the U.S. dollar continued its impressive run.
The first trading day of 2025 saw the U.S. dollar reach the highest level since September 2022. Not only does the news mean the Federal Reserve could keep interest rates at elevated levels, but there’s also expectations the U.S. dollar will remain strong this year due to policies proposed by President-elect Donald Trump.
Looking back at 2024, though, Basse says the biggest thing we learned is the U.S. dollar matters.
“Thursday morning, the Russian Ruble was at 115; the Brazilian Real was at 6.21. This is stimulating production around the world outside of the United States. And I think that’s something we really need to understand and learn from going forward,” says Basse. “Our margins are bad in United States. But for Brazilian farmers and for Russian farmers, they are still making money and willing to expand. So, I don’t have any expectations for any supply lever to pull global production back. And I think that’s going to be very important as we look towards the new year.”
Basse points out the Brazilian real was down 23% in 2024, which ranked the worst of all emerging currencies. The ruble was not far behind.
China’s Crumbling Currency
Basse says the other important lesson from 2024 deals with China, and the fact China doesn’t have to come to the U.S. to buy commodities.
“The Chinese really have slowed down their corn and wheat imports this past year. I think that’s important for next year. And for soybeans, they’ve really tapped on the brakes,” says Basse. “With that in mind, I don’t have a demand driver that really keeps markets heading higher for long periods of time outside of weather scares.”
According to Reuters, China’s yuan fell to 14-month lows as worries about the health of the world’s second-biggest economy, as well as the prospect of increased tariffs under Trump. Pro Farmer Washington correspondent Jim Wiesemeyer calls China a major wild card to watch in the new year.
“You have to watch China because they’re flexing their muscles, but they have a relatively weak for them economy,” Wiesemeyer says. “I think that’s part of the problem in their import side. So for China, not only from a market aspect, but geopolitical stance and Taiwan there are concerns.”
5 Biggest Policy Takeaways from 2024
Wiesemeyer provided his list of the top 5 takeaways from 2025 when it comes to policy and politics.
- No new farm bill, with hopes for 2025
- $21 billion in ag disaster aid
- $10 billion in farmer assistance
- U.S. wins USMCA case over GMO issue with Mexico
- Bird flu expands to other animals and people
Your Next Read: China 2025: 5 Predications to Watch
