AM Comments January 7 2025

Posted on Jan 07 at 07:05

Good morning. Back and forth we go at the CBOT, as corn and soybean markets have started the morning in a classic turn-around-Tuesday fashion. Yesterday's buying was at least in part related to news that Trump might lessen his tariffs to a more specific list of goods, but as the President-elect refuted this story on social media, that buying is being reversed this morning. Looking at the big picture, even though the holidays have come and gone, there is still a portion of the trade that is awaiting Friday's USDA report before adding any new sizeable positions in either direction, which likely keeps volatility elevated in the meantime. Corn futures this morning are trading 1-2 cents lower, soybean futures are down 9-11 cents, and the Chicago wheat market is down around a penny. Products are mixed, soybean meal is down $5-6/ton, and soybean oil is up 10-15 points. Outside markets are also mixed, crude oil futures are up 50-60 cents/bbl, the Dow Jones index is up 80 points, and the US$ index is down 5 points. The S&P500 and NASDAQ are both trading near unchanged.

 

Today's Reports: Monthly Trade Balance; Monthly JOLTs Jobs Data; API Energy Stocks

 

  • No new soybean deliveries from the CME Group this morning, but they did assign another 128 contracts of soybean meal, and 16 contracts of soybean oil.

 

  • Yesterday afternoon's CFTC commitment of traders report showed as of Tuesday, December 31st, managed money traders were net-long 228,806 contracts of corn (+67,859 on the week), net-short 42,447 contracts of soybeans (+25,435), and net-short 86,762 contracts of Chicago wheat (+8,247).

 

  • In soy products, funds are seen net-short 64,942 contracts of soybean meal (+31,429) and net-short 28,576 contracts of soybean oil (-9,015). To view our new CoT position maps, please click here.

 

  • The USDA's monthly winter wheat progress report, released yesterday, showed winter wheat rated in the g/ex category at 55% as of Sunday the 5th, which is a six-year high. Crops in KS were rated 47% g/ex, while Oklahoma was seen at 45%; in the east, IL was rated 69% g/ex, and OH was seen at 57%.

 

  • A spokesperson from the World Health Organization said risks to the general public from H1N1 bird flu remain low following news that a patient in LA died from the virus over the weekend, becoming the first such known case in the US. The patient was hospitalized in December and had other underlying health issues according to the LA Dept. of Health.

 

  • According to global shipping data from 2024, world crude oil exports in the year declined by 2%, which marks the first yearly fall since Covid. Sources familiar cited weakening demand growth and also a reshuffling of refineries and pipelines as reasons for the decline.

 

  • Weather forecasts for the US overnight moved the expected snowfall for the end of this week/weekend slightly further to the north than was seen yesterday, with most of northeast TX seeing significantly less accumulation than was forecast on Monday. Otherwise, not a lot of changes were seen over the next few days.

 

  • Week-two guidance through the middle of the month is continuing to show drier biases for both the northwest and the northeast, while the southern tier of the country and a swath through the central Plains see above average precip chances.

 

  • On the temp side, models remain in disagreement both in the 5-10 day and also the 10-15 day; the EU AI sees heat returning to the central states in the 5-10 day, with the EU ensemble seeing a bit of this, but keeping the heat mostly further north. The GFS model stays cold both in the 5-10 and the 10-15, while the AI's 10-15 day outlook is similarly cold. Generally speaking, it appears bouts of warm air will continue to be very short-lived into at least January the 22nd.

 

  • Argentina once again received better-than-expected rains on Monday, with satellite data showing 0.1-0.5" of rainfall falling in the south-central and northwestern growing regions over the last 24 hours. The northeastern half of the country into Paraguay and southern Brazil remained on the dry side, while the rest of Brazil picked up similar totals, with some locally heavier amounts.

 

  • Forecasts overnight also added light/scattered precip into these northeastern areas of Argentina in the week two period, which will need monitoring through the week. Should this forecast verify and better rains return by month-end, we would see it likely that some measure of premium will be extracted from both corn and soybean prices.

 

  • On the temperature side, models continue to show the warmest conditions over the next week will be seen in Paraguay and Uruguay and the surrounding parts of Brazil and Argentina that are in these areas; the rest of central and northern Brazil looks to largely remain cooler than average.

 

  • As a reminder for this week, markets at the CBOT will see an early 12:15pm central time close on Thursday, January 9th, to honor the death of former President Jimmy Carter. The proceedings will also delay the release of the regular weekly export sales report to Friday.