Good afternoon. The markets started mixed to lower this morning with soybeans seeing more selling than corn. A mid-session rally quickly came and gone with SH trading as much as 11 cents higher before giving up the rally and turning moderately weaker For the day, SH closed down 5.50 cents. CH finished the day 2 cents lower and WH finished the day up 1.25 cents.

The outside markets were generally mixed with the dollar index down 78 points after making new highs for the move (again). A weaker than expected PPI report weighed on the dollar. The weakness in the dollar helped gold futures bounce off the 50-day moving average and finish the day $8 - 10 higher. The equity markets finished the day higher with the Dow closing nearly 0.6% higher while the S&P 500 and the Nasdaq finished the day with only modest gains. The Producer Price Index (PPI) reading came in at just 0.2%, slightly below the average trade estimate of a 0.4% rise. The Core PPI was flat, which excludes food and energy. Tomorrow's CPI will be closely watched with the average analyst expecting the CPI reading to show a 0.3% rise for December.

Crude oil turned lower after failing to make fresh highs today. Crude oil had rallied nearly $5/bbl over the previous two sessions. Nearby WTI crude traded to its highest level since mid-August on new Russian sanctions, and higher fuel demand for home heating. Nat gas found support to finish the day roughly 2 cents higher. The Energy Information Administration lifted its US natural gas price forecast for this year. The agency raised its forecast by 6.4% to average $3.14 per million BTUs for 2025, while also forecasting its 2026 price estimate at $3.97. The EIA sees demand growth being led by exports to outpace an expected increase in production.

As the old adage goes, "the funds like to buy in 3 day intervals". If true, today would be that 3rd day. Over the previous two days, the funds bought an estimated 53K contracts of corn and 37K contracts of beans. We feel the funds are now long 310K contracts of corn, their largest net long since May 2022. For beans, the funds have now built a net long position estimated near 15,000 contracts. This is their first net-long bean position in over a year.

Board spreads were steady to weaker today for corn. CH/CK finished near unchanged at -10.25. CK/CN closed a penny weaker at -4.25. CN/CU settled down 2 cents at +31.25 after trading to a high of +36 on Monday.

Conab data released this morning didn't offer much for the bulls or the bears. Conab lowered the Brazilian corn production by 100 kmt while raising their bean production estimate, also by 100 kmt. Their corn production forecast now sits at 119.55 mmt, well below the USDA est of 127 mmt. Conab estimates their bean production at 166.3 mmt, which is also well below the USDA estimate of 169 mmt.

NOPA crush data will be released on Wednesday with the trade expecting Dec crush near 205.5 MB, up from 193.2 MB in Nov. Oil stocks are expected to rise to 1.25 bln lbs, up from 1.084 the previous month. Weekly ethanol data will also be released on Wednesday. Production is estimated between 321-325 mln gallons vs 324 mln the previous week.

Hot/dry conditions will continue to dominate weather conditions from C Argentina into S Brazil for the next few days. Daily highs exceeding 100 degrees will put additional stress on the growing crop. However, scattered showers will provide some relief. Additional rain chances are possible again next week. Today's wetter outlook limited buyer enthusiasm, and likely contributed to the failed rally attempt.