AM Comments December 5 2024

Posted on Dec 05 at 06:42

Good morning. More back-and-forth trade in Chicago to start Thursday, as the market remains largely directionless. Soybeans have flip-flopped every day so far this week, trading higher now this morning after trading lower on Wednesday, which is the same pattern that was seen on Monday/Tuesday. Grains are again quiet, though wheat futures have avoided making new contract lows so far overnight, which is a positive sign at least momentarily. The trade will see fresh export sales data this morning which is expected to remain robust, but otherwise, we expect another choppy day of trade as neither the bulls or the bears are able to gain much traction in the current environment. Corn futures this morning are trading near unchanged, soybean futures are 1-2 cents higher, and the Chicago wheat market is up 3-4 cents. Products are mixed, soybean meal is down around 50 cents/ton, and soybean oil is up 20-30 points. Outside markets are quiet/mixed, crude oil futures are up 10-20 cents/bbl, the Dow Jones index is unchanged, and the US$ index is down 5-10 points. The S&P500 is also near unchanged and the NASDAQ is down 10 points.

 

Today's Reports: Weekly Export Sales; Weekly Jobless Claims; Monthly Trade Balance

 

• There were no new corn deliveries for Thursday according to the CME Group, but there were 150 contracts of soybean meal assigned, and also 20 contracts of Chicago wheat.

 

• This morning's weekly export sales report for the week ending November 28th is expected to show corn sales in a range of 750k-1.5 mil mt's, soybean sales in a range of 1.1-2.5 mil mt's, and wheat sales in a range of 250k-550k mt's. 2025/26 corn sales are seen between 0 and 200k mt's, and 2025/26 soybean sales are seen between 0 and 75k mt's.

 

• As we mentioned yesterday, Statistics Canada will be out at 7:30am central time this morning with fresh crop production estimates. Trade sees wheat production up 4% from last year, canola production down 3.5% from last year, barely production down 14% from last year, and soybean production up 2.5% from last year.

 

• China's state buyer Sinograin announced today that it would be increasing purchases of domestic corn for the country's reserves as prices have plunged to their lowest level in more than four years.

 

• Staying in China, sources familiar said that purchases of Canadian canola have "come to a standstill" as buyers await likely retaliatory tariffs being implemented for Canada's tariffs on Chinese EV's. Buyers have increased purchases recently in preparation, but sources say coverage only extends through maybe February.

 

• This is a potential two-sided blow to the Canadian farmer, as the slow down in buying from China comes at the same time US President-elect Donald Trump has also threatened new import duties on canola coming from their country.

 

• In other news, Bitcoin finally surpassed the $100,000 mark as investors continue to see the nomination of Paul Atkins to head the SEC as a sign of deregulation, and further reason to keep buying the crypto-currency. It's gains since Trump's nomination in November have been more than 50%.

 

• French Prime Minister Michel Barnier did not survive a no-confidence vote on Wednesday, as his 2025 budget proposal failed to get bipartisan support. The vote was widely expected and did not have an immediate sharp reaction in EU markets. French President Emanuel Macron is set to make a statement at 8pm local time today, as Barnier becomes the shortest-serving Prime Minister in modern French history.

 

• Other geopolitical news on Thursday includes reports from South Korea that opposition lawmakers plan to vote this weekend on the impeachment of President Yoon Suk Yeol, following his failed martial law order late in the day on Tuesday. His Defense Minister, Kim Yong-hyun, who was said to have recommended the move, has already resigned.

 

• Fed Chair Jerome Powell said on Wednesday that he saw the American economy as being in "remarkably good shape," adding that this is reason to take a more cautious approach to rate decisions moving forward. The comments, however, did little to alter pre-existing notions in the market that another quarter percentage point cut was likely before the end of the year; FedWatch this morning shows the same 74% chance at said cut as was seen 24 hours ago.

 

• Lake-effect snow continued to hammer the Great Lakes region and parts of MI/WI on Wednesday, as NOAA's 24-hour snowfall map shows places in the far northern parts of these states that received 6-10" through 6am central time this morning. In the south, rains made their way out of the Gulf and into TX/LA, providing 0.5-1.5" of precip generally speaking, with some locally heavier amounts.

 

• Not a ton of forecast change again overnight, but models are continuing to seemingly shift the heaviest of the rains early next week further east and south, away from parts of MO/IL/IN where better rain chances were seen earlier in the week. Aside from the PNW, the rest of the country looks to hold in a mostly dry pattern through at least the middle of next week.

 

• Week-two forecasts have come into better agreement this morning, but confidence in their output still remains low; the PNW likely shifts back into a wetter pattern beyond the end of next week, while the majority of the country's mid-section sees near average precip.

 

• 5-10 day temp maps have taken a slightly cooler shift for the eastern half of the country overnight, as areas generally east of the Mississippi are now expected to see temps that are 3-5 degrees F below average through December 15th. Warmer air is still seen moving back east through the weekend and early next week, while 10-15 day maps also still show an above average bias.

 

• Weather in South America was as-advertised on Wednesday, with Argentina again being mostly dry and Brazil seeing light/widespread rains of 0.05-0.5" generally through most of its growing regions, with some locally heavier spots.

 

• Best rains through the end of the week look to fall in southern Brazil, where three-day totals are seen possibly reaching 5-6"; central Brazilian growing regions in MGDS, Sao Paulo, and Minas Gerais look to be mostly short-changed, before better rains are seen filling back in by the end of next week.