AM Comments January 10 2025
Good morning. Happy Friday. And happy USDA report day. Markets are mostly higher at the CBOT to start Friday trade, led to the upside by the soy complex. Soybean oil futures are up another 3% in overnight trade this morning, as traders anxiously await what guidance the Biden administration delivers on 45Z clean fuel tax credits today. Yesterday's reports that such guidance was expected today did not mention a time, which ion combination with the data dump from the USDA will likely keep markets on edge throughout the session. Also helping the bean oil trade are crude oil futures, which are also up more than 3% early this morning. Corn futures are trading around a penny higher, soybean futures are trading 2-3 cents higher, and the Chicago wheat market is unchanged to down a penny. Products are mixed, soybean meal is down around $1.50/ton, and soybean oil is up 1.10-1.20. Outside markets are also mixed, crude oil futures are up $2.40-2.60/bbl, the Dow Jones index is down 40 points, and the US$ index is near unchanged. The S&P500 is down 20 points and the NASDAQ is down 90 points.
Today's Reports: Monthly Non-Farm Payrolls; Monthly Unemployment; Weekly Export Sales; January WASDE; Quarterly Grain Stocks; Winter Wheat Seedings; CFTC Commitment of Traders
- Friday deliveries according to the CME Group include 44 contracts of soybean meal, 20 contracts of soybean oil, and 33 contracts of soybeans.
- As you can see by the report agenda, today looks to be a rather active session from a data standpoint. First up will be weekly export sales for the week ending January 2nd, which are expected to show corn exports between 700k-1.4 mil mt's, soybean exports between 400k-1.3 mil mt's, and wheat exports between 150k-500k mt's.
- Key out of the USDA data today will be first what final US crop yields are, then what production estimates are changed in South America, and then finally whether stocks are adjusted low enough to push carryout below 1.5 bil bu's. As we mentioned earlier this week, not a lot of changes are expected again for the bean balance sheet.
- Weekly data from the Buenos Aires Grain Exchange this week showed soybean planting had advanced to 97% complete, while corn planting had advanced to 91.6% complete. 49% of the soybean crop is rated in the excellent category, down from 53% last week, while 42% of the corn crop is rated in the same category, down from 48% last week.
- Official export data out of Ukraine shows the country exported 22.44 mmt's of grains from July 1 to January 8, up by roughly 3 mmt's from the same period last year. The total includes 9.98 mmt's of wheat, 10.16 mmt's of corn, and 1.98 mmt's of barley.
- China's ag ministry on Friday cut its corn import estimate for the 2024/25 season to 9 mmt's, which is down 4 mmt's or more than 30% from the December estimate, and is also down more than 60% from the 2023/24 import total of 23.41 mmt's.
- According to Malaysia's Palm Oil Board, palm oil stocks in the country fell to 1.709 mil tons in December, down from a revised November number of 1.836 mil tons. Production was seen at 1.487 mil tons vs 1.621 in Nov, and exports were seen at 1.342 mil tons vs 1.490 mil in Nov.
- Focus in the financial world will be on this morning's jobs report, which is expected to show an uptick in hiring in December by 165k jobs, while the unemployment rate is seen holding steady at 4.2%. Should these numbers come to fruition, it would lend credence to the Fed's more cautious stance with regards to rate cuts in 2025.
- Spot crude oil futures this morning are trading to their highest level since mid-summer, and also briefly eclipsed the October high, on news of new sanctions on both Russia and Iran, and also as temps in the US remain well below average levels for most of the country.
- Snowfall maps show parts of northeast TX and into southern OK have received upwards of 6-8" in places, which was mostly as advertised; the system will continue working its way northeast through the day today, before exiting the East Coast by mid-morning on Saturday. While this system works through the southeast, another smaller system is expected to work into the Northern Plains through the day tomorrow, possibly providing snow and ice to the northern Midwest and into the Great Lakes.
- Looking to next week, light/mixed precip is expected to continue impacting parts of the northeast and the Great Lakes region, but otherwise, a lot of the country looks to see a few days of drier conditions once this northern system makes its way out. Temperatures could see a brief warm up towards the end of next week, but 10-15 day guidance shows good agreement on a return of cooler air there after for most all of the country.
- Satellite data shows Argentine rains over the last 24 hours were slightly better than expected through the south-central and also the west-central parts of the country, with totals seen in a range of 0.05" to 0.75". Southern Brazil remained largely dry, while central and northern Brazil continued to see steady rains.
- Forecast-wise, again not a lot of change overnight; the models continue to show dry conditions for all but far western Argentina through the next week, before week two outlooks are still offering a return of rainfall before the end of the month. Temperature outlooks were also largely unchanged overnight, with the hottest conditions still seen where dryness has been most prevalent in northeast Argentina and into southern Brazil.
- Good luck with today's USDA data dump and have a good weekend!