AM Comments December 27 2024
Good morning. Happy Friday. Markets are taking a corrective breather to start end-of-week trading following yesterday's sharp run-up, with corn, beans and wheat all slightly lower. News remains in holiday mode, as headlines overnight were again mostly limited. As most of the trade remains away for holiday, we would expect today's session to again be rather technical in nature, with the corn market sitting at six-month highs and the soybean market trading right around the long term downtrend line. As we mentioned yesterday, biggest point to watch for today and early next week will be whether corn continues trading above old resistance or rolls over and falls back into the same range that has been seen since harvest. Corn futures this morning are trading 1-2 cents lower, soybean futures are trading 1-3 cents lower, and the Chicago wheat market is down around a penny. Products are mixed, soybean meal is down $1-2/ton, and soybean oil is up 30-40 points. Outside markets are also mixed, crude oil futures are up 60-70 cents/bbl, the Dow Jones index is down 140 points, and the US$ index is down 15-20 points. The S&P500 is down 20 points and the NASDAQ is down 70 points.
Today's Reports: Weekly Export Sales; EIA Weekly Ethanol Production/Energy Stocks
- This morning's weekly export sales report for the week ending December 19th is expected to show corn sales for the week in a range of 1.0-1.6 mmt's, soybean sales in a range of 1.0-1.8 mmt's, and wheat sales in a range of 250k-600k mt's. Of note, 2025/26 soybean sales are also estimated between 70k-125k mt's.
- This morning's weekly ethanol production report for the week ending December 20th is expected to show daily production in the week between 1.093-1.123 mil bbls, while stocks are seen between 22.400-23.175 mil bbls.
- Of note, there will be no CFTC Commitment of Traders data out for the week this afternoon due to the Christmas holiday; the report with data as of Tuesday, the 24th, will be out following the market close on Monday afternoon.
- Spokespeople from Bunge on Friday issued statements saying that damage assessments were ongoing at one of the company's soy processing plants in Cairo, IL following a conveyor belt fire on Thursday. Sources added that the plant would be temporarily shut down and that no injuries were reported from the incident.
- Brazil's crop agency Conab on Friday issued a report saying they see soybean exports from the country possibly reaching 105.5 mmt's in the coming season; this would compare to a Jan-Nov total this year of just 96.8 mmt's, with December exports seen between 1.5-1.75 mmt's. Exports were down in the 2023/24 season due to declines in production.
- Barge shipments down the Mississippi River in the week ending December 21st were seen at 796k tons, which was down 12% from the week prior. Corn shipments were down 11% at 421k tons, and soybean shipments were down 20% at 331k tons. STL barge freight rates were up 16 cents on the week to $15.72/short ton.
- The last 24 hours saw expectedly active weather across two separate areas in the US; first in the PNW, strong storms arrived through the evening providing heavy mountain snow to most areas at elevation, while even lower lying areas picked up 1-4" in a lot of places. And then in the south/southeast, satellite data shows rains of 0.25-1.5" impacting parts of E TX/LA/AR/OK.
- For Friday, models see the storm system in the south expanding north and east into the weekend, while conditions in the northwest will briefly clear up a bit throughout the day, before another system barrels down on the area tonight into tomorrow morning. Looking then to next week, active weather looks to remain as upper level air flow continues to allow systems to work in off the PNW and then down and through the rest of the country to the east.
- Temperature outlooks are in better agreement this morning, with the EU AI model now more in line with the ensembles on seeing a return of more seasonal air in the east January 5-10. The outlooks for the Canadian Prairies, however, continue to be quite different between the ensembles and the AI outlook, which means this will continue to need monitoring into next week. Generally speaking though, the US stays warm through next Tuesday/Wednesday before things turn back cooler.
- More of the same for South America on Thursday, as Argentina stayed dry and Brazil saw continued good rains in a corridor from Sao Paulo up through Mato Grosso and into Para in the central and northern parts of the country. Models largely see this same pattern holding through the weekend and into next week, before light rains are seen returning to southern Brazil into the opening days of the new year. Further out, Brazil looks to stay well watered, while 10-15 day outlooks maintain dryness in Argentina.
- Have a good holiday weekend!