PM Comments January 2 2025
Good afternoon. Happy New Year. Ag markets at the board of trade closed mixed on Thursday, with corn and soybeans higher and the wheat markets lower. Soybeans traded lower for the first hour to start the session this morning, but buying emerged to then drive prices higher for the day, and also to new highs for the week. Volume remained holiday constrained to an extent, which likely also will be the case tomorrow going into the weekend.
CH closed at 4.59 1/2, up a penny. CK was up a penny and 1/2 at 4.67 1/4. SH closed at 10.12, also up a penny and 1/2. SK was up 2 and 3/4 at 10.25. WH finished at 5.45 3/4, down 5 3/4. Products were mixed, January soybean meal closed at 310.90, up $3.30/ton, and January soybean oil closed at 39.72, down 6 points. New highs for the move in meal and an outside day lower for bean oil. Livestock markets were mostly higher, February live cattle closed at 193.60, up $2.00, January feeders closed at 266.47, down $3.45, and February hogs closed at 81.15, down 15 cents. New highs for the move in both live cattle and feeders. Outside markets are mixed, crude oil futures are up $1.30-1.50/bbl, the Dow Jones index is down 200 points, and the US$ index is up 90 points. The S&P500 is down 30 points and the NASDAQ is down 40 points. This the highest trade in crude oil since early October, while the $ index again made new contract highs. The S&P and the Dow are both having outside days lower.
Spreads ended mostly lower Thursday, with corn spreads being unchanged to a penny and 3/4 lower, while soybean spreads were down a quarter cent to down 2 and 1/4. CH/CK closed at -7 3/4, down a half cent, and SF/SH closed at -12 1/2, down 1/4 of a cent. SH/SK closed at -13, down a penny and a quarter. WH/WK also traded to a new two-month low today at -12 and closed at -11 3/4.
EIA's weekly ethanol report this morning showed production numbers that were in line with recent weeks, while stocks were seen at the third highest level of the marketing year. Daily production in the week was seen at 1.111 mil bbls, which was up 0.4% from both last week and the same week last year. Stocks totaled 23.639 mil bbls, which was up 2.4% from last week and up just 0.5% from the same week last year. We estimate corn usage in the week at 109.8 mil bu in the week, while cumulative use in the marketing year has reached 1.808 bil bu. On the petroleum side, the EIA report showed crude oil stocks in the week at 415.601 mil bbls, which was down 1.178 mil on the week; gasoline stocks were dup 7.717 mil bbls at 231.384 mil, and distillate stocks were up 6.406 mil bbls at 122.867 mil.
Other data specific to the ag space on Thursday included November soybean crush numbers from the monthly fats and oils report, and also monthly grain crush figures for ethanol. Soybean crush in the month was seen at 210 mil bu's, compared to 216 mil bu's in October and 200 mil bu's in November 2023. Combined stocks of crude and once refined soybean oil were seen at 1.613 bil lbs, which was up 2.5% from last month and up 0.9% from November of last year. On the corn side, the grain crushing report showed corn used for ethanol in the month at 464.938 mil bu's, which was down 0.4% from last month but up 1.7% from the same month last year. Total corn consumption in the month was seen at 514 mil bu's, down less than 1% from last month and up 1% from November of last year.
Weather forecasts for the Midwest were again mostly unchanged on Thursday. Models continue to see a cut-off low working its way over the Rockies and then across the mid-section of the country over the weekend and into early next week, which will provide anywhere from 3-12" of snowfall for a fairly narrow corridor from KS/NE nearly directly east through the Appalachian Mountains and out to the East Coast. Temperatures look to continue dropping through the weekend and into next week in the east, with highs as far south as the Gulf seen some 10-15 degrees F below average. Model output for week-two shows above average precip chances in the northern Plains and also in the southwest into Mexico, while dry conditions are seen through the mid-south and broader eastern Midwest.
Forecasts for South America continue to show minimal rain potential for all but far northwest Argentina through the weekend and into next week, while all but far southern Brazil looks to stay well-watered as there remains little change to the forecast here. Concern levels in Argentina will rise significantly should this current forecast pattern still be present in another two-three weeks, but in the meantime, soil moisture levels are currently good enough to at least combat hot/dry conditions temporarily. Traders at this point are also under the impression that even if production declines marginally in Argentina, it is likely that production in Brazil will make up for these losses as of now.