AM Comments December 11 2024
Good morning. Markets in Chicago are back to their choppy overnight trading just a day after the USDA's December WASDE report, as the data was apparently not exciting enough to spur more than a one day frenzy. Volume has actually been decent so far to start Wednesday and corn is mostly following through on yesterday's strength, but trading ranges have been small and aside from wheat, the ag's have been unable to trade above yesterday's highs. Corn futures this morning are trading around a penny higher, soybean futures are trading 2-3 cents lower, and the Chicago wheat market is up 1-2 cents. Products are mixed, soybean meal is trading near unchanged, and soybean oil is down 30-40 points. Outside markets are mostly higher, crude oil futures are up 80-90 cents/bbl, the Dow Jones index is down 10 points, and the US$ index is up 25 points. The S&P500 is up 5 points and the NASDAQ is up 40 points. Coffee gapped lower to start Tuesday after making new contract highs on Monday.
Today's Reports: Monthly Inflation/CPI; EIA Weekly Ethanol Production/Energy Stocks
- Ag deliveries remained active on Wednesday, as the CME Group announced another 456 contracts of soybean meal had been assigned for delivery, as well as 31 contracts of soybean oil and 2 contracts of Chicago wheat.
- In the aftermath of yesterday's December WASDE report, traders generally view the data as bullish corn, and neutral for soybeans and wheat, For a full recap of the numbers, please click here. To view Mid-Co's supply and demand slides, please click here.
- This morning's weekly ethanol production report for the week ending December 6th is expected to show daily production in a range of 1.044-1.082 mil bbls, and is expected to show stocks for the week in a range of 22.853-23.400 mil bbls.
- For tomorrow morning's Conab crop update, the trade sees soybean production up slightly from last month at 168.63 mmt's, and sees corn production up similarly to 121.04 mmt's. There are not expected to be any major changes to planted area or yield figures for either crop.
- Ukraine's Ag Ministry on Tuesday said that corn harvest in the country was complete on 96% of the planted area, adding that 24.6 mil tons of the crop had been taken out of fields as of December 5th, which compares to 26.9 mil tons as of December 8th last year. Total grain harvest is seen at 54.3 mil tons, down from 57.1 mil last year.
- The Ag Ministry also said Ukraine soybean harvest had reached 99% complete, with production seen increasing nearly 25% from last year to 6 mil tons. Sunflower harvest was estimated at 97% complete and sugar beet harvest was estimated at 99% complete.
- Both headline and core inflation are expected to tick up 0.3% on a monthly basis in this morning's November CPI report, while annual inflation is seen edging 0.1% higher to 2.7%. And as we mentioned yesterday, other financial market headlines on Wednesday will include a rate decision from the Bank of Canada, where a half-point cut is widely anticipated.
- The northeast caught a bit of a break on the snowfall over the last 24 hours, as satellite data shows just light accumulation in parts of VT/NH/ME. Light snows also worked their way through the upper Midwest, as parts of MN/WI/IA and over into the Dakotas/WY/NE also picked up measurable snowfall, while snow also continued to fall in the Rocky's in CO.
- On the other side of the country, rains were able to work their way up the East Coast on Tuesday, with totals ranging from 0.1-2.5" generally with some locally heavier spots. The rains stretched from parts of LA in the Gulf, up and over through MS/AL/GA/SC and then on up into VA and WV.
- For today, the low pressure system spinning up the East Coast will linger through the day on Wednesday, with precip switching from rain to snow sometime later this morning. Exactly where/when this shift occurs will be extremely hard to forecast, but models this morning see the transition beginning roughly in KY/OH sometime early this morning.
- Snow chances will then linger through the northeast and eastern Midwest through the night tonight and into tomorrow, before Thursday and Friday look to be mostly dry. Dryness does not last though, as system will beginning working north out of TX Friday night/Saturday morning and will linger through most of the weekend before moving east next week. Week-two forecasts are again drier this morning, but as we've said all week, confidence this far out is low.
- Argentina was mostly dry on Tuesday, while rains worked their way further north in Brazil. West-central Brazil saw more spotty rains, while the central and northern parts of the country picked up 0.1-1.5" according to satellite data. Areas just north of the city of Sao Paulo also good rains further to the south.
- Forecasts show heavy rains centered in Paraguay and far northern Argentina the rest of this week, while just scattered precip will be seen elsewhere. Central Brazil looks to have the best odds at rains, but totals do not look to be more than a half inch for the most part, while most of Argentina sees a similar scenario.