AM Comments December 10 2024
Good morning. And welcome to the final WASDE report day of the 2024 calendar year. Markets have again started Tuesday's trade on the quiet side, as none of corn, soybeans or wheat are more than a few cents from unchanged. The December WASDE report is typically a non-market-maker, and the trade is anticipating a similar scenario following 11am central time this morning. Following today's report, Coanb will give updated estimates to Brazilian supply and demand/production figures early on Thursday morning; here too though the trade does not expect a lot of fireworks, but near-ideal weather since October has produced the possibility that crop size estimates could come in larger than last month. This means the broad market theme of large South American likely remains in place. Corn futures to start Tuesday are trading unchanged to a penny lower, soybean futures are trading 2-4 cents higher, and the Chicago wheat market is trading 2-3 cents lower. Products are mixed, soybean meal is up $1-2/ton, and soybean oil is down 60-70 points. Outside markets are also mixed, crude oil futures are down 20-30 cents/bbl, the Dow Jones index is down 120 points, and the US$ index is up 25 points. The S&P500 is unchanged and the NASDAQ is up 40 points.
Today's Reports: December WASDE; API Energy Stocks
- CME Group this morning assigned 200 contracts of soybean meal for delivery, as well as 3 contracts of Chicago wheat and 2 contracts of Minneapolis wheat.
- Trade sees 2024/25 corn ending tocks in today's report at 1.906 bil bu's (1.938 bil previous), soybean ending stocks at 469 mil bu's (470 mil previous), and wheat ending stocks at 814 mil bu's (815 mil previous). World corn stocks seen at 303.57 mmt's vs 304.14 mmt's, soybean stocks 132.45 mmt's vs 131.74 mmt's, and wheat stocks 256.68 mmt's vs 257.57 mmt's.
- Brazil corn and soybean production are both seen marginally higher from last month at 127.09 and 169.30 mmt's respectively, while in Argentina, soybean production is seen ticking up slightly to 51.35 mmt's, but corn production is seen declining slightly to 50.86 mmt's.
- Chinese customs data for the month of November showed the country's soybean imports at 7.154 mmt's, which was the lowest monthly figure since 2018 during Trump's first Trade War. Cumulative imports through the first 11 months of the year have reached 97.09 mmt's, which is up 9.4% from last year.
- Also out of China overnight, monthly agricultural supply and demand estimates showed a lowering of corn production in the current season to 293.84 mmt's due to excessive rainfall and also warm temps during the early part of November likely leading to storage issues. Soybean production was seen slightly higher than last month at 20.65 mmt's.
- Brazilian ag consultancy AgRural, in a weekly report, said they estimate Brazil soybean planting at 95% complete as of December 5th, which is up 4% from the week prior and also 4% ahead of last year on the same date. First corn planting was seen at 95% complete also, which matches last year's planting pace.
- According to the Malaysian Palm Oil Board, stocks of the edible oil fell to 1.836 mil tons in the month of November, down from a revised 1.885 mil ton figure in October. Production was seen at 1.621 mil tons, while exports were seen at 1.487 mil tons vs 1.744 mil in October.
- Financial markets in the US will have a bit of a global lean on Tuesday, as the trade mostly awaits next week's Fed meeting and subsequent interest rate decision; the $ index was higher against a number of world currencies overnight whose countries are expecting rate cuts in the next couple days, including notably the Canadian dollar, the Swiss franc, and the Euro.
- Focus also remains in China following the weekend Politburo news, as aside from soybean info, fresh trade data overnight also showed exports slowed sharply on the month, while imports also unexpectedly fell, further outlining the troubling times for the world's second largest economy.
- More active weather was seen in the eastern half of the US on Monday, though warm temps kept snowfall mostly further north than has been the last several days; northern NY into VT/NH/ME saw continued steady snowfall, while in the Midwest, light snows were seen in northern WI/MN, as well as the Dakota's. Heavy snow was also observed in/around the CO Rockies.
- Rains are expected to continue impacting the southeast and East Coast through the rest of this week, while the remainder of the country aside from the PNW and northern CA remains largely on the dry side. Models then have rains filling in a bit further to the west early next week, though the EU is further west with precip than the GFS.
- Week-two forecasts then see another dry pattern emerging following these rains, though both the EU ensemble and EU AI models, as well as the CPC's outlook, all show a small pocket of wetness in TX/OK, and also show wet conditions remaining in the PNW. Due to ongoing shifts in the MJO, confidence in any forecast beyond a week is not great.
- Following a brief two-day cold snap to close out the week this week, temperatures through most of the country look to continue to have a warmer bias through the weekend and into next week, while 10-15 day temp guidance also shows it likely that air stays mild into Christmas; the west looks to be warmer than the east, but all areas are seen above average.
- Heavy rains continued falling in southern Brazil through the day on Monday, with satellite data showing 0.5-3" of moisture in the 24-hour period ending at 3am central time this morning from northern RGDS into southern MGDS and over into Sao Paulo. Forecast the rest of the week remains largely unchanged and non-threatening.