AM Comments December 9 2024

Posted on Dec 09 at 07:45

Good morning. Markets at the CBOT are mostly quiet coming out of the weekend, as Monday trade has again kicked off with light volume and small trading ranges for the second consecutive week in corn and soybean futures. Headlines over the past 72 hours were focused largely again on geopolitical happenings, as South Korean President Yoon survived an impeachment vote but is still expected to step down, and President Bashar al-Assad, who has ruled Syria for nearly 25 years, has fled the country just two weeks after rebels launched an offensive against his military. These headlines, along with the ongoing theme of expected record or near-record crop production in South America, again look to mostly control price action this week, as tomorrow's USDA numbers for December are not expected to be overly market moving. Corn futures are trading unchanged to a penny higher to start the week, soybean futures are trading 3-4 cents higher, and the Chicago wheat market is up 5-6 cents. Products are higher, soybean meal is up around $3/ton, and soybean oil is up 5-10 points. Outside markets are also mixed, crude oil futures are up 80-90 cents/bbl, the Dow Jones index is up 30 points, and the US$ index is down 10 points. The S&P500 is unchanged and the NASDAQ is down 30 points; new contract highs again to start the day in the NASDAQ.

 

Today's Reports: Weekly Export Inspections

 

• Deliveries on Monday were more on the financial side, as the CME Group announced 150 contracts of 10-year T-notes had been assigned, as well as 43 contracts of meal and 5 contracts of wheat.

 

• Friday afternoon's CFTC commitment of traders report for the week ending December 3rd showed managed money traders in the week were sellers of 9,221 contracts of corn (net-long 88,220), buyers of 9,254 contracts of soybeans (net-short 72,217), and were sellers of 10,267 contracts of Chicago wheat (net-short 69,386).

 

• In soy products, managed money traders sold 13,766 contracts of soybean oil (net-long 9,427) and bought 2,118 contracts of soybean meal (net-short 73,299).

 

• Ukrainian ag consultancy APK-Inform on Monday said they see soybean production in the current season at 6.15 mmt's, which is up from their previous estimate of 5.93 mmt's made in October. The group also adjusted their soybean export forecast higher to 3.55 mmt's.

 

• Newly elected Mexican President Claudia Shinebaum said late last week that a bill on GMO corn was taking longer than originally expected, adding lawmakers had previously added a clause restricting imports of yellow corn that would have major impacts on the economy. Sources say her goal is to change the legislation to focus on the planting of yellow corn, not its import.

 

• Federally inspected beef production in the US in the week ending December 7th was seen at 532 mil lbs, up 14.5% from the week prior; pork production was seen at 560 mil lbs, up a similar 14.1% on the week. YTD beef production is down 0.4% at 24.94 bil lbs, and YTD pork production is up 1.3% at 25.91 bil lbs.

 

• Egypt over the weekend announced that an arm of the military had taken over international grain buying tenders from the General Authority for Supply Commodities (GASC), in a move that significantly raises concerns by traders about the transparency and trustworthiness of the new system.

 

• News out of China over the weekend included a Politburo meeting where officials said monetary policy in 2025 would be "appropriately loose," which caused stocks here to rally to gains of more than 2% to start the week. This would be the first time since 2010 that such a policy of loosening would be in place.

 

• Traders in the US this week will have one eye turned towards next week's Federal Reserve FOMC meeting, which is scheduled for Wednesday/Thursday, the 18th and 19th. The CME's FedWatch tool this morning shows traders pricing in a more than 87% chance at a quarter-point rate cut.

 

• Along with previously mentioned political happenings in Syria and South Korea over the weekend, other geopolitical news included an announcement of a new election in Romania after officials declared the first vote void due to alleged Russian interference; and in France, President Macron has yet to announce a new Prime Minister after his previous pick was ousted last week.

 

• Weekend weather in the US saw the return of precip to the south/southeast, with 72-hour satellite data showing rainfall totals of 0.1-2.5" through an area stretching from E TX to IN/OH/WV. In the north, snowfall continued in the northeast and also in MN/WI/MI, with the heaviest amounts falling in parts of NY. Snowfall was also observed at elevation in the northwest.

 

• Looking at this week, additional precip is seen impacting the eastern half of the US and also the Great Lakes region, where lake-effect snow is expected to continue falling. Rains will continue impacting the southeast and up the East Coast through the first half of the week, before a couple days of dryness are expected Thursday/Friday to end the week.

 

• Snow chances will be better beyond mid-week, as temps through the first part of the week will mostly be warm enough to keep any precipitation in the form of rain and not snow. A brief mid-week cool-off does look to occur though, as cold Canadian air is again forced south and east through the upper Midwest and into the northeast. Highs Weds/Thurs will be in the single digits for parts of the Dakota's/MN/WI.

 

• Week-two forecasts coming out of the weekend show a generally dry bias for the western half the country December 17-23, while the PNW remains wet. Gulf moisture is seen continuing to impact parts of TX, but there is model disagreement on how far north this moisture can make it; the EU AI and GFS ensemble show wetter odds for parts of OK/MO/IL, while the EU ensemble is dry in these places.

 

• Heavy rainfall was observed in S Brazil over the weekend, with totals in parts of Parana and Santa Catarina exceeding 8-10". The moisture will likely cause localized flooding issues, but is otherwise welcome as areas here had been teetering on the too dry side. Northwest and west-central Brazil also saw scattered rains over the weekend, while central and eastern Brazil was mostly dry.

 

• Argentina saw light/scattered rains mostly in the north and the east, but totals were less than a half inch for the most part. For the rest of the week, rains are expected to continue falling in central/south-central Brazil, while northern areas see more spotty precip. Argentina will see decent rains in a small pocket in the north, while no more than light precip is expected through the rest of the country.