AM Comments December 2 2024
Good morning. Ag markets in Chicago have returned from the Thanksgiving holiday trading quiet/lower, as volume has been light and trading ranges have been small in Monday's overnight trade. Data will be a little bit on the heavy side however for a Monday, as CFTC data delayed from last week will be released after the close this afternoon, and will be closely preceded by soy/grain crush data for the month of October; weekly export inspection data will be also out as regularly scheduled during the morning hours, and is expected to stay strong due to a continued good run of daily sales and also global price competitiveness. Otherwise, it looks to be another week of trading large South American crop prospects and an impending shift in the US political landscape. Corn futures are trading 1-2 cents lower to start the week, soybean futures are down 4-5 cents, and the Chicago wheat market is down 3-4 cents. Products are mixed, soybean meal is up $1-2/ton, and soybean oil is down 40-50 points. Outside markets are also mixed, with crude oil futures trading around 90 cents/bbl higher, the Dow Jones index trading around 20 points lower, and the US$ index up around 50 points; the S&P500 is near unchanged and the NASDAQ is up 30 points.
Today's Reports: Weekly Export Inspections; October Fats & Oils/Grain Crushings; CFTC Commitment of Traders
- Monday's December delivery slate was again rather active; for delivery date December 3rd, the CME Group this morning announced that there were 111 contracts of corn assigned, 394 contracts of soybean meal and 45 contracts of KC wheat.
- As mentioned Friday, the average trade guess for October soybean crush in this afternoon's Fats and Oils report is 210.9 mil bu's, which would be a new record for any month; soybean oil stocks are seen at 1.520 bil lbs. On the corn grind side, trade sees corn used for ethanol in the month at 462.3 mil bu's, which would exactly match use in October of last year.
- Along with an 11 mmt export quota set by the government on wheat exports for the February 15 - June 30 period, Russia also set export quotas for corn, barley and rye at 0 mmt's for the same period, effectively enacting an export ban during this time period.
- A new system for exporting ag goods out of Ukraine went into effect on Sunday, December 1, which effectively sets minimum exports prices on key goods in an effort to tackle price distortions linked to the war with Russia. December's prices have already been published, with the ministry noting that an update will occur on the 10th of each month going forward.
- The US$ index has started the week in positive territory as a weekend post by Donald Trump on his Truth Social platform warned BRICs nations that they would potentially face '100% tariffs' if they went ahead with a plan to develop a currency system that would challenge the US$ as the world's global reserve currency.
- A sharp sell-off in the Euro due to fears over a collapsing French government is also seen as helping the $ index early on Monday; French Prime Minister Michel Barnier made another concession overnight to the far-right National Party (headed by Marine Le Pen), as he continues to attempt to get his 2025 budget over the finish line in a sharply divided parliament. A vote of no confidence is likely this afternoon barring a "last minute miracle" according to sources familiar.
- Trump also had meetings with Canadian Prime Minister Justin Trudeau at his Mar-a-Lago residence in FL on Friday evening, where the two discussed the border, trade, and energy amongst other topics, in what was a 'very productive' meeting according to sources familiar.
- Other political headlines to start the week, though not necessarily market-moving, include news that current US President Joe Biden had pardoned his son, Hunter, who had been convicted on drugs and firearm charges after previously pledging to stay out of the legal proceedings.
- A band of snowfall impacted areas of N MO/S IL and into S IN and OH over the weekend, while lake effect snow also continued to be seen in the Great Lakes areas; light snow also fell across parts of the northern Plains and into Canada. Otherwise, mostly dry conditions were seen across the rest of the country Saturday and Sunday.
- For this week, the forecast remains largely unchanged as lake effect snow will continue impacting parts of northern WI/MI and further into the northeast, while the rest of the Midwest stays cold and dry. Moisture looks to work its way into the Gulf states starting Wednesday/Thursday, with up to 3" of rainfall possible by early next week.
- A more progressive temp pattern is seen by the forecasts this week, as ridging in the west keeps temps here mostly above average; this warm air has chances to make its way east over the next week/10 days, but conditions east of the Rocky's generally stay cooler than normal into the end of the week and weekend. Wednesday looks to be the most mild day for the Midwest this week.
- 10-15 day outlooks show a wetter bias in the southeastern part of the US than what was seen to end last week, while the mid-section of the country holds in a mostly dry patter. Both the EU AI and the EU ensemble models are wetter than the GFS in both the southeast and the northern Plains, which will need monitoring this week. Week-two temp maps show more average temperatures for the east and above average in the west.
- In South America, good rains were seen across almost the whole of both Argentina and Brazil over the past 72 hours according to satellite data; western Argentina was dry, but the rest of the country picked up 0.1-1" generally speaking, with some locally heavier amounts in both the north and the east. Heavy rains of 3+" were seen in southern Brazil, while central/northern Brazil saw rains of 0.5-1.5" generally speaking.
- Forecasts for this week show continued good rain chances across most all of Brazil, while all but far northeast Argentina looks to be on the drier side. Light/scattered rains will potentially impact central Argentine growing regions by the end of the week, but confidence is low.