AM Comments January 24 2025
Good morning. Happy Friday. Corn and soybean markets saw gap-lower starts to begin the last overnight trading session of the week last night, and are currently trading lower still this morning. In an interview with Fox news late Thursday evening, President Trump, while on the topic of China trade tariffs, said he would rather not have to use the measures, but added they give him the power to curb fentanyl trafficking; this, likely combined with some measure of profit taking from the longs, has brought about a 'risk-off' mood to end the week. Due to yesterday's wide-ranging trade, the gaps are not open on the charts but have still given the market a bearish lean nonetheless. Corn futures this morning are trading 3-5 cents lower, soybean futures are trading 10-14 cents lower, and the Chicago wheat market is down 6-7 cents. Products are lower, soybean meal is down $7-8/ton, and soybean oil is down 40-50 points. Outside markets are mixed, crude oil futures are up 20-50 cents/bbl, the Dow Jones index is down 120 points, and the US$ index is down about 50 points. The S&P500 is down 5 points and the NASDAQ is down 10 points. Of note, gold futures are up around $20/oz after closing lower yesterday for just the second time in the last 13 sessions.
Today's Reports: Weekly Export Sales; January Cattle on Feed; CFTC Commitment of Traders
- This morning's weekly export sales report for the week ending January 16th is expected to show corn sales for the week in a range of 700k-1.7 mil mt's, soybean sales in a range of 600k-1.8 mil mt's, and wheat sales in a range of 200k-600k mt's. 2025/26 sales are estimated between 0 and 50k mt's for all three crops.
- The USDA's monthly cattle on feed report for January is due after the close today; the report is expected to show the US feedlot herd as of January 1 at 11.882 mil head, or 99.6% of last year. Placements in December are estimated at 1.698 mil head, while marketings are seen at 1.746 mil head; placements would be unchanged from last year, while marketings would be just over 101% of last year.
- The Buenos Aires Grain Exchange released its weekly crop update on Thursday; the report showed a jump in the 'regular/bad' category from 21% to 28% in soybeans and from 14% to 20% in corn. The group also cut production estimates for both crops by 1 mmt a piece, now seeing soybean production at 49.6 mmt's and corn production at 49.0 mmt's.
- Staying in Argentina, the country's government on Thursday announced that it would temporarily be lowering export taxes on some ag products, citing improving health in its economy. The cuts look to go into effect on Monday, and will be in place through the end of June. The soy tax is expected to drop from 33% to 26%, the tax on soy products is expected to drop from 31% to 24.5%, and the tax on corn and wheat is expected to drop from 12% to 9.5%.
- According to the USDA, barge shipments down the Mississippi River in the week ending January 18th totaled 428k tons, which was down just over 5% from last week but up more than 11% form the same week last year. Corn shipments in the week were seen at 186k tons, down 15% on the week, while soybean shipments were seen at 224k tons, down just 2% on the week.
- USDA on Thursday released its monthly livestock slaughter report for the month of December; the report showed commercial red meat production in the month at 4.55 bil lbs, which is down just fractionally from both last month and last year. Cattle slaughter in the month totaled 2.542 mil head, which was 2% below last year, while hog slaughter in the month totaled 10.748 mil head, down just 0.7% from last year.
- Financial market news not related to Trump or politics included a decision by the Bank of Japan to raise interest rates by a quarter-percentage point, bringing them to their highest level since 2008. The increase wasn't overly shocking, but caused the Yen to rally and the US$ to decline in overnight trading.
- US weather features into the weekend include a snow event for the Rocky Mountains and parts of CA/UT/NV, while the northeast and areas on the downwind side of the Great Lakes are also expected to continue seeing generally moderate snowfall. The southeast and southern Midwest look to see several rounds of rains then going through next week, keeping this area wet into the opening days of February.
- Temperature forecasts have been in fair agreement all week this week on a shift to warmer temps beginning Monday and lasting through next week and into next weekend; 10-15 day outlooks are then showing cooler Canadian air working its way back into the northern US, but the southeast and generally the eastern half of the country are expected to continue seeing above average temps at this point until at least February 8th.
- Parts of northern and central Brazil saw one of their driest days in recent memory on Thursday, as satellite data shows just light/scattered precip in the south and south-central parts of the country, while dry conditions were seen in the north. Argentina saw several pockets of 1/2" rains, with the best coverage being seen in the south/southeast corner of the country.
- Overnight forecasts were again largely unchanged into next week, as the models continue to see good rain chances for most of Argentina/southern Brazil over the next 5 days or so, while a return to drier conditions continues to be forecast thereafter. As production estimates have began to be trimmed in Argentina, that these rains arrive as forecast is critical. The northern half of Brazil looks to see a few days of drier conditions, but regular rains are still expected to return going into February.
- Have a good weekend!