AM Comments January 2 2025
Good morning. Happy New Year. Grain markets this morning are called mixed to higher to start the first day of trading in 2025, and will open up at 8:30am central time. Some semblance of positivity regarding China's economy from President Xi over the past couple days has caused a small pop in the outside markets to start Thursday, which traders say could likely spill over into the ag space at least early on. We would largely expect the day's price action to otherwise continue to be dominated by technical trading and fund movement, with the holiday causing just a brief two-day trading window before the markets close again for the weekend. As we get into next week, a more regular trading pattern should return with volume presumably returning to more normal levels by mid-week. In the outside markets that have already begun trading, crude oil futures are trading around $1/bbl higher and are above the 200-day moving average for the first time since October, the Dow Jones index is up 300 points, and the US$ index is up 20-30 points and has again made new contract highs. The S&P500 is up 50 points and the NASDAQ is up 210 points.
Today's Reports: Weekly Jobless Claims; EIA Weekly Ethanol Production/Energy Stocks; USDA Monthly Fats & Oils; USDA Monthly Grain Crushings
- The CME Group's delivery slate for January 2nd includes another 648 contracts of soybean meal, 192 contracts of soybean oil, and 380 contracts of soybeans.
- As we get into January, next key items for the grain markets look to be the USDA's January WASDE report and also the quarterly grain stocks and winter wheat seedings report, all due out on Friday, January 10th. Conab will then give an update on Brazil production figures the following week on January 14th.
- Today's USDA Fats & Oils report for November is expected to show soybean crush in the month at 208.1 mil bu's, which would be up 4% from last year. Soybean oil stocks are seen at 1.496 bil lbs, which would be down just over 6%. Traders see the grain crushings report showing corn used for ethanol in the month at 463.7 mil bu, up 1.4% from last year.
- Indonesia's state-owned news agency, quoting the country's deputy energy and mineral resources minister, said on Wednesday that the government aims to finalize regulations on the implementation of the B40 biodiesel blending mandate by the end of this week, adding that they would give transition time for its implementation. The mandate was originally expected to take effect January 1, and would raise requirements form the current B35 rate.
- According to a presidential decree published on December 31, Mexico's government has stated that products including wheat and fertilizers, along with other goods linked to the country's basket of staple foods, would be exempt from tariffs through December 31, 2025.
- Authorities Thursday morning are investigating whether there is any link between yesterday's terrorist attack in New Orleans, where a former US Army vet drove his vehicle through a crowded NOLA street killing and injuring several people, and a Tesla Cyber Truck explosion outside of Donald Trump's hotel in Las Vegas.
- Officials say an ISIS flag and improvised explosive devices were found in the vehicle used in New Orleans, while Elon Musk, head of Tesla, has said that his company had confirmed the explosion in Vegas was caused by "very large fireworks and/or a bomb" that were carried in the back of a rented Cybertruck.
- Weather forecasts for the Midwest have moderated a bit on the extreme cold seen for next week over the last 48 hours; temps will still drop off for most of the eastern US, but models now see the cold being more short-lived than previously forecast. Temperatures look to still remain below average through mid-month, but it appears the worst of the cold looks to only last a few days next Tues/Weds/Thurs.
- On the precip side of things, models see a system working through the central Midwest through the day today and into Friday, providing snowfall and some rain further south to parts of IA/IL/IN and then further east into OH/WV by the end of the day on Friday. In the PNW, active weather looks to continue at least through the weekend, with rain/snow/ice expected for northern CA into OR and WA.
- Looking into next week, models have come into better agreement on the path of the winter storm system that is expected to work through the central US Sunday/Monday; as of this morning, the GFS is seeing the snow band stretching from roughly the KS/NE border straight east through N MO, then through the south-central IL and into southern IN/OH. The heaviest totals are seen reaching 6-8", with a more general 1-4" seen otherwise.
- 24-hour satellite data in South America shows central and northern Argentina received rains of 0.1-1" generally speaking through the day on Wednesday, with these rains also stretching into Paraguay and southern Brazil. East-central Brazil looks to have also picked up good rains over the last couple days.
- Forecasts this morning are showing continued light rain potential in northwest Argentina through the weekend, while dry conditions are expected through the rest of the country and into southern Brazil. Northern and central Brazil look to continue to be well-watered, with there being little/no forecast concern here. Heat remains confined mostly to southern growing areas, as well as Argentina.