AM Comments January 28 2025
Good morning. Markets are taking a bit of a breather this morning following Monday's active day of trade, with corn, beans and wheat all trading just marginally higher to start the day. New news is largely lacking, as traders are continuing to evaluate the effects of recent rains in Argentina and how much crop damage has occurred via recent dryness. And in the financial world, stock index futures are trying to recover some of yesterday's losses but have been largely unable to do so at this point in the morning, while the $ index saw a gap-higher open and is currently trading above yesterday's highs. Corn futures this morning are trading 1-3 cents higher, soybean futures are trading 3-4 cents higher, and the Chicago wheat market is up 2-3 cents. Products are higher, soybean meal is up around 50 cents/ton, and soybean oil is up 50-60 points. Outside markets are mostly higher, crude oil futures are up around 50 cents/bbl, the Dow Jones index is unchanged, and the US$ index is up 65 points. The S&P500 is up 10 points and the NASDAQ is up 30 points.
Today's Reports: Monthly Durable Goods Orders; API Energy Stocks
- According to IMEA, safrinha corn planting in Mato Grosso as of Friday, January 24th, has reached just 1.15% complete, which compares to 11.23% last year and the five-year average of 11.17%. Mato Grosso accounts for nearly 40% of annual Brazilian corn production.
- Staying in Brazil and along similar lines, private group AgRural said yesterday that as of Thursday the 23rd, just 3.9% of the country's soybean crop had been harvested, which is the lowest in the last 5 years for that date, and compares to 10.8% complete last year.
- According to the Buenos Aires Grain Exchange, officials estimate that Argentine farmers will likely sell around half of their 10 mmt's of stored soybeans due to the recent tax cuts announced by the government. They also say the development will likely spur additional sales of the new crop, but did not give a figure.
- A Republican lawmaker from Texas in recent weeks introduced a bill that would repeal the 45Z clean fuel incentives that are part of the Inflation Reduction Act; the legislation as written would apply retroactively to the start of 2024, though credits are currently in effect now. The bill was referred to the House Ways and Means Committee on January 16th.
- Ohio Governor Mike DeWine last week sent a letter to the acting EPA head, requesting a delay in President Trump's proposed shift to year-round E15 sales due to the lack of time available to install and set up necessary infrastructure. The request was for a delay until no earlier than spring of 2026, and comes at the opposition of ethanol industry backers, who say the proposed shift has already been slow-played.
- Yesterday's route in the tech markets led Nvidia to shed 17% of its market cap, marking the biggest one day loss of capital ever for a single stock; the company still ranks as the third largest in the US, and its stock is still roughly 94% higher than it was a year ago. As we are barely through the first month of 2025, the NASDAQ also obviously had its worst day of the year yesterday.
- Satellite rainfall data out of South America shows the last 24 hours were largely dry for northern Argentina, while areas in the south and southeast picked up rains of trace amounts to a half inch generally speaking. Southern and south-central Brazil saw similar rains, while areas in the north saw more scattered precip, which was of benefit to farmers here trying to get started with soybean harvest.
- Forecasts this morning were slightly drier than was advertised yesterday afternoon, but otherwise show the same general themes that have been discussed going back to last week; northern and northwest Argentina look to see decent rains into the end of this week before things then turn drier again beyond the opening days of February, while the monsoon season in Brazil is slowly starting to subside but looks to linger for at least another 5-10 days.
- And in the US, models continue to show an active pattern for generally the eastern half of the country through the rest of this week and into the weekend, with the northern tier expected to receive additional snowfall, while areas further south see rains. Models are also in good agreement on a return of moisture to the PNW by the end of this week, while the southwest holds as the driest area in the country.
- Updates to the US temperature outlook overnight were also minimal, as the models continue to show well above average air temps into the second week of February; as we mentioned yesterday, cold air will be present in Canada, but appears to be mostly limited to the far northern parts of MT/ND as far as the States are concerned.