American Ag Could Benefit From A Weakening Dollar

There is optimism surrounding a recent drop in the strength of the U.S. dollar.  Mike Zuzolo, president of Global Commodity Analytics, said many are hoping that the drop opens some more export opportunities for U.S. commodities.

“And one of the things that's happened here in the last 10–15 days has been a very big correction in Bitcoin futures," Zuzolo said.  "I'm waiting to see as Wednesday is also a big day for the Federal Reserve and other macro issues that are impacting these currencies, and is kind of giving the commodities as a whole a risk-off look, whether it's crude oil, unleaded gas, feeder cattle, or soybeans, everything is down pretty good on Wednesday, and so, you see that macro play there. But the big thing to be watching, I think again, goes back to the dollar trend. It doesn't become a safe haven again and a buy again, and I think that would be signaled if gold did what the bitcoin is doing right now. If the market gives up on the inflationary bias and the trade war fears of the gold rally that we've seen to new record highs in 2025, I will take note of that.” 

Zuzolo added South American weather may have a quicker-than-average impact on the markets at the end of this year.

"It really has. And I think this goes back to one of the biggest things that I think we can take away from 2025 is the market, when it comes to corn, beans, and wheat, has traded U.S. supply-demand fundamentals, not global supply-demand fundamentals, and I think that puts more spotlight on the crude oil, on the dollar, and also the wheat," he said.  "But I think that's part of the reason, along with the fact that I think we've seen the South American weather market pulled forward by about two to three weeks here. We usually start that weather market after Thanksgiving, closer to Christmas, at least in my mind. That's when we usually start talking about it more and pricing it into the trade. But it seems to me, with that trade deal signed, maybe the weather has become a much more important feature. That would make sense, because my bias is very simple. I don't think China is going to be pressured into anything from the United States, especially when it comes to ag commodities. And if that's the case, why would they buy unless South America had weather problems?”

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