AM Comments January 17, 2025

Posted on Jan 17 at 08:05

Good morning. Grain prices are mixed this morning ahead of a 3-day weekend. There will be no markets on Sunday night or during the day session on Monday. Grain markets will re-open on Monday evening. A small bit of recovery is being seen in corn and soybean markets this morning. Nearby spreads on corn and beans have firmed slightly late this week as producer selling has waned. Yesterday's sharp selloff in soybeans was attributed to more consistent model agreement that Argentina would see better rain chances in the extended forecast. March beans closed a penny and a half under the 100-day moving average yesterday, but is back slightly above this morning. A close back below the level today ($10.20 1/2) would open up the possibility of more technical downside. March corn is working on its 4th straight day of support near $4.73 1/2. Short-term resistance for March corn remains at this week's high near $4.80. Crude is steady this morning, but is set to notch a weekly gain for the 4th straight week. Equity futures are higher with the dollar index higher as well. A choppy session is expected for grains today ahead of the holiday weekend.

 

Today's Reports: Commitment of traders, Housing starts

 

  • Argentina weather has continued to be warm and dry this week. Rain chances increase this weekend. More consistent showers are predicted late next week and into next weekend. The updated weather models in ARG will be a key driver of the bean prices coming out of the long weekend. Brazil's center and north areas continue to get rain, with early bean harvest being delayed in a few spots. Southern Brazil has been dry but should see some improved rain chances during the same time period as Argentina.

 

  • The U.S. forecast shows mild temps for a couple of more days before bitter cold settles in across the Midwest early next week. Freezing temps are expected as far south as Texas and northern Florida. There will be limited precipitation during this period. Temps do moderate by late next week. Livestock stress is possible during the early part of next week, but crop impacts are expected to be minimal. The longer term models show another potential shot of cold air during the middle of February.

 

  • China announced its 4th quarter GDP grew at a 5.4% year over year rate, which was ahead of a 5% expectation. China's 2024 full-year GDP forecast came in at 5%, which matched the Government's budget. Despite meeting the GDP objective, economic growth concerns remain in China as the Government continues to look at additional stimulus measures. The prospects of stricter tariffs from the U.S. make predicting growth figures more challenging for China in 2025.

 

  • In its weekly update, The Buenos Aires Grain Exchange sharply dropped its rating of soybean condition from 49% good to excellent to 32%. The corn rating dropped from 42% to 39% good to excellent. For Argentina, corn is 95% planted and beans are 98% planted. These ratings updates come a day after the Rosario Grains Exchange dropped its corn production estimate from a range of 50 to 51 MMT to 48 MMT. The group also stated its soybean production estimate is lower than the previous 53 to 53.5 MMT range, but did not release a specific figure.

 

  • Louis harbor river levels have fallen nearly 3 feet over the past few days. Conditions should improve through next week, but then fall off again. The lower water levels are particularly concerning with cold temps coming in again next week. River traffic in St. Louis and the IL river have already been hampered with slow movement, and next week does not look to be helpful if more ice forms. Truck and rail movement is also expected to slow next week in the below freezing temperatures.
  • Hamas noted overnight that the issues that arose in relation to the terms of the ceasefire agreement with Israel have been resolved. Hamas is expected to release the first hostages this weekend under the Gaza ceasefire deal that was agreed to earlier this week. The ceasefire deal will occur over 3 stages, and Hamas is expected to release 33 Israeli hostages over the first phase. Israel will release all Palestinian women and children under the age of 19 during the first phase.