AM Comments December 19 2024
Good morning. Corn and soybean markets are taking a bit of a breather to start Thursday's trade following yesterday's sharp sell-off. New lows have been scored overnight in the case of both commodities, but so far at least, extreme follow through selling has not been seen. Selling has been seen in the wheat space however, as new contract lows were scored here also overnight, after the market performed better in relation to the rest of the group yesterday. And in the case of equity markets, a bit of turn-around-Thursday trade is being seen; stock index futures are higher after also sharply selling off on Wednesday, and the $ index is slightly lower. With yesterday's moves being as sharp as they were throughout most markets, we would see today's trade as likely being on the choppy side as traders try and determine the best plan of action going forward. Corn futures this morning are trading around a penny lower, soybean futures are trading around a penny higher, and the Chicago wheat market is down 7-8 cents. Products are mixed, soybean meal is unchanged to 50 cents lower, and soybean oil is up 40-50 points. Outside markets are also mixed, crude oil futures are down 15-20 cents/bbl, the Dow Jones index is up 320 points, and the US$ index is up 5 points. The S&P500 is up 50 points and the NASDAQ is up 170 points.
Today's Reports: Weekly Export Sales; Weekly Jobless Claims; Q3 GDP Update; Q3 PCE
- This morning's weekly export sales report for the week ending December 12th is expected to show corn sales for the week in a range of 800k to 1.6 mil mt's, soybean sales in a range of 825k to 2.0 mil mt's, and wheat sales in a range of 225k to 550k mt's.
- The USDA's cattle on feed report for the month of December, which is due out after the close tomorrow, is expected to show the feedlot herd as of December 1 at 12.01 mil head, which would be down 0.1% from last year. November placements are seen down 4% at 1.79 mil head, and marketings are seen down 2% at 1.718 mil head.
- Staying in the livestock sector, the USDA's quarterly hogs and pigs report is due out on Monday; the report is expected to show the December 1 hog inventory at 75.61 mil head, which would be up just 0.2% from last year. Breeding inventory is seen 0.1% higher at 6.007 mil head, while market hogs are seen increasing by 0.2% to 69.609 mil.
- Chinese customs data for the month of November showed the country's grain imports were down sharply from the same month last year; corn imports at 330k mt's were down 92% from last year, while wheat imports totaled just 70k mt's, which was down just under 90% from last year.
- FranceAgriMer on Wednesday again lowered its 2024/25 soft wheat export forecast to countries outside the EU by 0.4 mmt's to 3.5 mmt's; this is now down 6.7 mmt' compared to last year. Inversely, exports to countries inside the EU were adjusted slightly higher to 6.16 mmt's, while ending stocks were also adjusted slightly higher to 2.87 mmt's.
- India's Securities and Exchange Board announced it would be extending a suspension on trading in derivative contracts of key ag commodities through the end of January; the move, originally introduced as one year ban in 2021, has seen two year-long extensions already. That this extension was only a month was seen as a positive sign by local traders.
- Following expected interest rate cuts in the US on Wednesday, both the Bank of Japan and the Bank of England held their benchmark lending rates steady. A cautionary tone was given by the heads of both, saying more information was needed on inflation before making further moves.
- President-elect Donald Trump on Wednesday made clear that he is strongly against the proposed funding bill that was announced on Tuesday, a sentiment that his new government cohorts Elon Musk and Vivek Ramaswamy echoed throughout the day on Musk's X social media platform. The Republican leader said he wanted lawmakers to include an increase to the debt ceiling while Biden was still in office, saying that if Democratic lawmakers wouldn't cooperate now, why would they cooperate once he's in office later in 2025?
- Snow has begun falling from a low pressure system in the northern Midwest overnight, and looks to work its way east through parts of ND/MN/WI and then further towards the East Coast through the day on Friday. Snows also look to return to parts of northern CA and throughout the rest of the PNW Saturday/Sunday.
- Elsewhere through the US, most of the rest of country likely sees drier conditions through the weekend and into the first part of next week, before rains are seen returning to the mid-south and southeast next Tuesday/Wednesday.
- Beyond the Christmas holiday, week-two outlooks continue to show above average chances at moisture throughout most of the country, with the wettest outlooks being seen in the northwest in parts of CA/OR/WA. Temperature outlooks remain downright warm for most all of the US beginning early next week, with the heat expected to last at least through the first days of January.
- Better than expected rains again showed up in Argentina over the last 24 hours, which likely helped add to yesterday's selling in the Chicago ag space. Totals ranged from 0.1-1" generally speaking, with some locally heavier amounts. Brazil saw drier conditions through southern and central growing areas, while areas in the north and northeast saw rain totals similar to those seen through Argentina.