AM Comments December 3 2024
Good morning. Turn-around-Tuesday at the board of trade this week, as markets are clawing back what they lost on Monday. Fresh news remains mostly absent, as macro spillover continues to be the main driver of price. The $ index is giving back some of yesterday's gains, while palm oil has also again traded to new highs for the move overnight which is helping lift both soybeans and soybean oil this morning. Otherwise, volume remains light and trading ranges have been small as the bull camp needs fresh positive input to avoid a drifting of prices into the end of the year. While demand of late has been good, the market is solely concerned with what happens beyond February both with new sales and unshipped sales already on the books. Corn futures this morning are trading 1-2 cents higher, soybean futures are trading 7-9 cents higher, and the Chicago wheat market is up 5-7 cents. Products are higher, soybean meal is up $2-3/ton, and soybean oil is up 70-80 points. Outside markets are mixed, crude oil futures are up around $1.20/bbl, the Dow Jones index is down 10 points, and the US$ index is down 15 points. The S&P500 and the NASDAQ are both near unchanged.
Today's Reports: Monthly JOLTs Jobs Data; API Energy Stocks
- The CME Group on Tuesday assigned another 111 corn contracts for delivery, and also 43 soybean meal contracts and 74 oats contracts.
- Lots of data out after the close on Monday for the ag markets, with the first being the monthly fats and oils report, and also the grain crushing report for the month of October; the fats and oils report showed soybean crush for the month at 216 mil bu's, which was easily a new record. Soybean oil stocks were seen at 1.486 bil lbs. To view the full report, please click here.
- The grain crushing report for October showed corn grind in the month at 460.493 mil bu's, which was just slightly bearish in relation to the average trade guess. Total corn usage, however, was up 3% from last month and 1% from last year at 510 mil bu's. To view the full report, please click here.
- Also out yesterday afternoon was CFTC commitment of traders data for the week ending November 26th. Managed money traders as of last Tuesday are seen net-long 97,442 contracts of corn (-17,186), net-short 81,472 contracts of soybeans (-13,770), and net-short 59,118 contracts of Chicago wheat (-7,572). In soy products, funds are net-long 23,193 contracts of soybean oil (-32,866), and are net-short 75,416 contracts of soybean meal (-11,716).
- 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.
- Private US ag group StoneX released their monthly crop estimates for Brazil on Monday; the group sees soybean production unchanged from last month at 166.2 mmt's, but lowered their corn production estimate from 128.5 mmt's to 121.8 mmt's, citing cuts in first crop production due to dryness in the south.
- Same group sees soybean exports in the 2024/25 year at 103 mmt's, up 1 mmt from last month, and sees corn exports unchanged from last month at 40 mmt's. Old crop exports were adjusted 4 mmt's higher on soybeans and 1 mmt higher on corn citing strong shipped volumes.
- Australia's government, in a quarterly report, slightly raised their estimate of 2024/25 wheat production by 0.1 mmt to 31.9 mmt's, which is up roughly 23% from last year. Barley production was adjusted lower by 0.5 mmt's to 11.7 mmt's, while canola production was adjusted higher by 0.1 mmt to 5.6 mmt's.
- China overnight announced export bans to the US on metals and other military-grade materials in response to new sanctions on chip-makers by the Biden administration this week.
- Satellite data shows unexpected snowfall of around an inch fell through parts of IA/IL/IN/KY on Monday, while lake effect snow also continued to be seen in the northeast and around the Great Lakes. Otherwise, the rest of the country saw dry conditions.
- Forecast updates were again mostly minimal overnight, as the models continue to be in fair agreement on mostly dry conditions the rest of this week aside for the Gulf states, where moisture is expected to begin working north and east starting tomorrow afternoon. Snow continues to be expected in the far northeast and into Canada through the weekend.
- Model agreement ends beyond a week though, as the EU AI model's 10-15 day outlook is significantly wetter through the mid-section of the country than either the EU or GFS ensembles; and in fact, the CPC's week-two outlook is almost exactly the opposite, as it has normal to below normal precip chances from the Southwest up into the Midwest. This will need monitoring into the end of this week.
- Temp anomaly maps shifted warmer overnight, and now show an exiting of the cold air currently in place across most of the Midwest by the end of the weekend. A brief warm-up also looks to happen on Wednesday this week, but highs quickly return to the teens and twenties for another couple days to end the week.
- South America on Monday saw good rains through most of southern and south-central Brazil, with this moisture also working its way into northern Argentina. The rest of Argentina was dry, while north-central Brazil and further north saw just light/scattered precip.
- Forecast updates overnight were also minimal here, as it continues to be likely that most of Argentina sees dry conditions over the next week before rains return by mid-month; in Brazil, the south will be well-watered while northern and central areas see a drier pattern than what has been present over the past month.