AM Comments December 30 2024
Good morning. Markets are quietly higher at the CBOT to kick off the second of two consecutive holiday-shortened trading weeks, as the markets will again shut down on Wednesday to celebrate the flipping of the calendar to 2025. As was the case last week, we expect the holiday to keep trading rather subdued for the most part this week, with the bulk of traders likely not returning to their desks until at least the beginning of next week. Corn and soybean futures are perched at or near recent highs to begin the week, so regardless of what volume shows up over the next few days, the bull camp will be interested in holding these former resistance levels that now look to act as initial support. Corn futures this morning are trading 2-3 cents higher, soybean futures are trading 7-9 cents higher, and the Chicago wheat market is up 4-6 cents. Products are higher, soybean meal is up $5-6/ton, and soybean oil is up 10-15 points. Outside markets are mixed, crude oil futures are up around 30 cents/bbl, the Dow Jones index is down 350 points, and the US$ index is down 20 points. The S&P500 is down 50 points and the NASDAQ is down 200 points.
Today's Reports: Weekly Export Inspections; CFTC Commitment of Traders
- The Buenos Aires Grain Exchange released their weekly crop report late last week for Argentina; most notable in the data was an increase in the planted area projection for corn by 300k ha's, with 200k of this being taken from soybean area. The report estimated corn planting at 80.9% complete and soybean planting at 84.6% complete.
- Same group estimated Argentine wheat harvest at 88.5% complete, up from 76.1% last week. Production estimates were maintained at 18.6 mmt's.
- USDA's ag attaché in Brazil on Friday also made planted area adjustments; the group increased soybean planted area in Brazil to 47.0 mil ha's and raised their production forecast to 165 mmt's. Same group also revised their export estimate higher to 105 mmt's, which would be a new record.
- Operations resumed over the weekend at a Cairo, IL Bunge soy crush facility following a belt fire late last week that temporarily paused work at the plant and caused a market reaction in an otherwise thin trading environment.
- Former US President Jimmy Carter died at the age of 100 over the weekend; the 39th President will get a state funeral, with current President Biden announcing that January 9th will be a national day of mourning. There has been no announcement as of this writing from any of the exchanges regarding market closure on that day, but we will keep you updated should one be made.
- Otherwise, outside markets look to see another mostly quiet week of trade, as Wednesday marks the beginning of a new month, a new quarter and a new year. Aside from regular weekly jobs numbers on Thursday, the data slate for the week is rather light.
- Warmth kept weekend precip in the eastern half of the US as rainfall and not snow, with a wide majority of the mid-south and eastern Midwest picking up 1-2" of rainfall generally speaking; areas around the Gulf saw larger totals in some places, while the northern Midwest saw slightly lower totals of 0.1-0.5". Out west, most of the precip fell as snow with places in the northern Rockies seeing 6-12".
- For this week, models see the remnants of the northwest system working their way east through the country and exiting the northeast by Thursday, while a couple days of drier weather are left behind it. The calm is short-lived though, as several more systems are forecast to make their way through this area into next week.
- In the east, it will be precip type/amount the will be most watched for out of these systems into the first days of January, as models are not in great agreement on exactly where the rain/snow line will be. The CPC (Climate Prediction Center) over the weekend added the risk of heavy snowfall for a large area of the country January 4th-7th, with equal risk seen further east January 7th-10th.
- Seemingly not in question will be the temp outlook, as models are in good agreement that a return to cooler temps are coming for the eastern 2/3 of the country beyond Tuesday/Wednesday this week. Temps look to be some 5-15 degrees F below avg from IA to the East Coast beginning the middle of this week and lasting as of now through at least mid-month.
- Some better than expected rains impacted southwestern Argentina over the weekend, but totals were light and generally missed the bulk of the country's main growing regions. Southern and southwest Brazil were also largely dry, but the rest of the country saw good rains of 0.5-2.5" according to satellite data.
- Forecast for this week shows light rain chances for western and south-central Argentina, while the same potential exists through southern Brazil; central and northern Brazil look to continue receiving avg to above avg rainfall. Extended outlooks show rain potential in west/northwest Argentina, while the eastern part of the country into southern Brazil remain in a dry forecast.
- As a reminder, markets will trade normal hours today and tomorrow (Tuesday), and then will be closed Tuesday night, Wednesday, and Wednesday night, with another hard 8:30am cst re-open on Thursday morning. Thursday through the end of the week then will have normal trading hours. Tomorrow is also the first notice day for January futures.