AM Comments December 17 2024
Good morning. Overnight markets are again choppy at the CBOT to start Tuesday as holiday trading fully settles in. Like Sunday night, ranges are once again small and volume is light as the market will close early just one week from today for Christmas Eve, and then be closed all the following day for Christmas Day. A portion of the financial trade will hang around for another couple of days this week to see the Fed's interest rate decision on Wednesday but otherwise, it seems the holiday is here and most are disinterested in taking on any sort of new positions in the low volume/low activity environment. Corn futures this morning are trading unchanged to a penny higher, soybean futures are trading unchanged to a penny lower, and the Chicago wheat market is trading 1-2 cents higher. Products are lower, soybean meal is down around $1/ton, and soybean oil is unchanged to 5 points lower; new contract lows overnight for Jan meal at $285.0. Outside markets are mixed/lower, crude oil futures are down around 60-70 cents/bbl, the Dow Jones index is down 170 points, and the US$ index is up 15 points. The S&P500 is down 20 points and the NASDAQ is down 40 points.
Today's Reports: Monthly Retail Sales; API Energy Stocks
- Private Brazilian ag consultancy AgRural on Monday said they see Brazilian soybean production in the 2024/25 season at 171.5 mmt's, which compares to Conab at 166.2 mmt's and the USDA at 169.0 mmt's. The group cited favorable weather as the main reason for the increase, and said they would give another update in January once harvest was in full-swing.
- According to Ukraine's Ag Ministry, cumulative grain exports in the current marketing year have so far reached 19.5 mmt's, which is up from roughly 16 mmt's the year prior. However, December grain exports through the first half of the month are seen at just 1.1 mmt's, which is down roughly 60% from last year.
- Indonesia's palm oil exports in November were seen at 2.005 mil tons, which was down just over 11% from October; crude palm oil sales were down more than 21% at 229,421 tons, and sales to China were up 12% at 364,167 tons.
- France's Ag Ministry on Tuesday said that winter grain planting in the country had been completed, and that final planted area was seen up nearly 7% from last year at 6.3 mil hectares. The total, however, is still seen nearly 2% below the five-year average.
- Financial market participants in the US on Tuesday will have their sights set on the Federal Reserve's last FOMC meeting of 2024, which is scheduled to kick-off today and run through tomorrow. Markets are currently pricing in a 97% chance that rates get trimmed by a quarter point, but some feel a period of pausing may then be in store going into 2025 as inflation has started to creep back up again.
- Other financial news overnight came out of China, where a Reuters report illustrated that Chinese officials planned to keep the country's growth target for 2025 at 5%, but would also be raising the budget deficit to 4%, which would be the highest level on record and a full percentage point higher than 2024's goal of 3%. Of note, the targets are not usually announced until a parliament meeting in March, and may still change between now and then.
- Snowfall on Monday continued in the northwest, and also was observed in the northern Plains through parts of ND and MN, and also in the northeast mostly in PA and NY. Further to the south, light rains of generally less than an inch fell in a band from AR to IN/OH.
- Forecasts are again largely unchanged overnight, as models remain in fair agreement on the rest of this week seeing continued rains in the southeast/mid-south through Wednesday, while snow is likely in the upper Midwest and also in the northeast beginning the end of the week and lasting through the weekend.
- Aside from the far north and areas near the Canadian border, most of the US will continue to see above average temps into the end of the week, before the east again cools to below average on Friday and stays that way until ridging allows warmth to return again by the middle of next week.
- Further out, week-two precip maps trended wetter overnight and now show average to above precip chances for a majority of the country's mid-section, while the PNW is seen staying downright wet and the northeast sees a bit of a drier spell. Maps still see a drastic warm up occurring in the same period, with temps expected to be some 15-20 degrees F above average to end the month/year.
- Southern Brazil and Argentina were dry on Monday, while Brazil's northern and east-central growing areas picked up mostly light/scattered rains of less than 1"; best rains were seen in the northwest, but these mostly missed major soy growing areas.
- Forecast the rest of the week is like yesterday's runs in showing light rain potential for the northern two/thirds of Argentina into the end of the week, while most all of Brazil will continue to be well-watered. The extended range forecast is again dry for Argentina, but the models have been seemingly been underestimating rainfall here all season, which is keeping confidence in this solution low.