AM Comments December 23 2024

Posted on Dec 23 at 07:14

Good morning. Happy Holidays. Ag markets in Chicago are higher to start this Christmas week Monday in what has been an expectedly quiet overnight trading session. Like most of the week last week, news over the weekend was largely uneventful; the US government was able to pass legislation late in the day on Friday that avoided a government shutdown which has the $ index trading higher this morning, but otherwise, the majority of traders have made their last market moves of 2024 and have turned their attention to the holidays. Specific to corn and beans, key for the last several trading sessions of the year will be whether March corn is able to clear the recent highs just above $4.50, while it will be important to soybean traders to see spot futures hold the new contract lows that were made last week. Corn futures this morning are trading 1-2 cents higher, soybean futures are trading around a half cent higher, and the Chicago wheat market is up 2-3 cents. Products are mixed, soybean meal is down around 50 cents/ton, and soybean oil is up 40-50 points. Outside markets are mixed, crude oil futures are down 20-30 cents/bbl, the Dow Jones index is down 110 points, and the US$ index is up 50-60 points. The S&P500 is unchanged and the NASDAQ is up 90 points.

 

Today's Reports: Weekly Export Inspections; USDA Monthly Cold Storage; USDA Quarterly Hogs & Pigs

 

  • Friday afternoon's CFTC commitment of traders report showed selling by fund traders pretty much across the ag space in the week ending December 17th; data showed managed money traders are now seen net-long 159,415 contracts of corn (-6,475 on the week), net-short 76,252 contracts of soybeans (-17,933), and net-short 87,401 contracts of Chicago wheat (-20,621).

 

  • In soy products, funds sold 16,544 contracts of soybean meal, and sold 14,881 contracts of soybean oil; this makes them now net-short 88,971 contracts of meal and net-long just 2,639 contracts of oil. Of note, this is a new record net-short meal position by the funds, and this is the smallest their net-long in bean oil has been since flipping from a net-short at the start of October. To view our new COT charts, please click here.

 

  • Also out Friday afternoon was the USDA's monthly cattle on feed report for December; the report didn't offer a lot of excitement and was mostly as expected, but showed the US feedlot cattle herd as of December 1 at 11.982 mil head, which was 100% of last year. Placements in November were down about 4% to 1.796 mil head, while marketings in November were down just 1% at 1.725 mil head. To view the full report, please click here.

 

  • A USMCA (US-Mexico-Canada) panel last week ruled in favor of the US regarding a trade dispute that arose last February over genetically modified corn being imported from the US following Mexico's ban on said product. The US Trade Representative Office said the panel ruled in favor of all 7 US claims, with Mexico now having 45 days to reach compliance. Officials from Mexico have responded, saying they will respect the decision even if they don't agree with it.

 

  • US federally inspected beef production in the week ending December 21st was seen at 535 mil lbs, which was up just over 1% from the week prior; pork production in the week was seen at 558 mil lbs, also up just over 1% from the previous week. YTD beef production is down 0.5%, while YTD pork production is up 1.2%.

 

  • As mentioned at the top, the US Congress early in the day on Saturday was able to get the bill that was approved by the House on Friday through the Senate and across President Joe Biden's desk, ending the risk of a federal shutdown until at least March. We won't go all the way down the political rabbit hole this morning, but as it pertains to agriculture, the agreement means an extension of the current Farm Bill, and also $10 bil in economic aid likely coming in the form of direct payments.

 

  • Other political happenings over the weekend included another social media barrage by President-elect Trump on his Truth Social platform; Trump on Saturday fired off a series of posts threatening to take control of the Panama Canal if "exorbitant prices" charged to US ships weren't lowered. This prompted a reply from Panama's President, who said the waterway's sovereignty is non-negotiable, to which Trump replied, "We'll see about that!"

 

  • Snows showed up mostly as expected for the northern Midwest and northeastern quarter of the US over the weekend; 1-4" was generally seen across ND/MN/WI/MI and further into the northeast, with the heaviest amounts of 6+" seen in southeast WI and also further east in parts of western NY. A mix of rain and snow also fell in the PNW, while the remainder of the country was mostly dry.

 

  • For this week, snow is expected to continue falling through the Great Lakes regions and the northeast through Tuesday morning, while the PNW is expected to continue seeing a mix of rain and snow all the way into next week. Elsewhere, rains look to return to the southeast/mid-south starting early Tuesday morning, as a pair of system will move north and east through the area first in the mid/early part of the week and then again through the weekend and into next week.

 

  • Temperatures look to start a warming trend today/tomorrow, and will remain well above average for most all of the country through the end of the year and into the first days of January. 10-15 day maps over the weekend did take a cooler shift though, as cold Canadian air is seen being allowed to drop back into the US beyond January 2nd/3rd.

 

  • In Argentina, a pocket from Cordoba to Buenos Aires generally speaking saw better than expected rains of 0.5-2", though the rest of the country was largely dry. Far southern Brazil and the southeast half of Paraguay also saw dry conditions over the weekend, but the rest of the two countries saw good rains of 0.5-2.5", with several areas receiving locally heavier amounts.

 

  • Models largely expect more of the same for this week, with 5-day precip maps showing just light rain potential in Argentina's northwest growing regions, while the rest of the country and into Paraguay and southern Brazil are expected to be dry. The rest of Brazil looks to continue seeing average to above average precip for another week, with some small areas forecast to receive 6-8" over the next five days.

 

  • As a reminder for the rest of the week, markets will have normal trading hours today (Monday) and tonight, and will see the day session close early at 12:05pm central time on Tuesday; there are then no markets Wednesday or Wednesday night, with a hard 8:30am central time reopen set for Thursday; Thursday/Friday will then see normal trading hours to end the week. Next week largely follows the same pattern, but we will update on that at the end of this week.