AM Comments January 29 2025
Good morning. Ag futures are higher this morning to start mid-week trade, with all three of corn, beans and meal seemingly seeing equal amounts of strength to the upside. In the case of corn, spot futures are back near the highs made last week, while beans and meal are trading above the previous two days' highs. The forecast for Argentina will likely be construed as the main catalyst for the morning rally, as 5-day maps are drier this morning in the central part of the country than was seen yesterday, and week two maps are also drier in the the southern/southeastern part. For reference, timing-wise it is similar to late June/early July in the states, which is why the forecasts are garnering so much attention. Corn futures this morning are trading 4-7 cents higher, soybean futures are trading 6-9 cents higher, and Chicago wheat futures are trading 6-7 cents higher. Products are mixed, soybean meal is up around $4/ton, and soybean oil is down 5-10 points. Outside markets are mixed, crude oil futures are down 10-20 cents/bbl, the Dow Jones index is down 60 points and the US$ index is up 35 points. The S&P500 is down 10 points and the NASDAQ is unchanged.
Today's Reports: EIA Weekly Ethanol Production/Energy Stocks; FOMC Interest Rate Decision
- This morning's weekly ethanol production report for the week ending January 24th is expected to show daily production for the week in a range of 1.079-1.097 mil bbls, while stocks are seen in a range of 25.774-26.174 mil bbls.
- According to customs data from the European Commission, EU soybean imports in the marketing year that began in July have reached 8.03 mmt's, which is up form 7.11 mmt's in the same period last year; corn imports were also seen up from last year at 11.41 mmt's. The report also showed soft wheat exports at 12.18 mmt's, compared to 19.35 mmt's last year. The commission notes trade data remains incomplete for several countries dating back to 2023/24.
- Russian Ag Minister Oksana Lut on Wednesday said grain exports out of Russia in the 2024/25 season would likely be around 57 mmt's, which is roughly 20% below last year's record exports of 72 mmt's. Lut cited that exports through the first half of the year totaled just 37 mmt's, while quotas for the second half of the year have been reduced by 70% from last year to protect the domestic market.
- Reuters early yesterday morning reported that the Parana state port authority in Brazil, who oversees operations at two of Brazil's biggest southern ports, said sand had been detected in 51 truck loads of soybean meal during inspections. The port authority said the trucks had come from Mato Grosso state, but declined to give further details citing data protection laws.
- The Federal Reserve's January FOMC meeting will wrap up this afternoon, with the CME's FedWatch tool currently showing a more than 99% chance that interest rates remain unchanged. The Bank of Canada will also make a rate decision this morning, where similar to the EU on Thursday, economists predict a quarter-point cut is likely.
- Other financial market happenings on Wednesday include private earnings reports for all three of Microsoft, Meta, and Tesla, though they will not be released until after the markets close. Trump's nomination for Health Secretary, RFK Jr, is also set for his Senate confirmation hearing later today, which could potentially cause ripples through the ag markets.
- As we mentioned at the top, forecasts for Argentina and southern Brazil trended drier overnight than the previous days' runs, which has provided the pop this morning. Both the 3-day and 7-day forecast now show just light/scattered rains for areas in the far northern part of Argentina and into Paraguay and southern Brazil, while rains in the week two period that were advertised for Buenos Aires and areas to the south have been removed.
- The forecast did also trend drier for central and east-central Brazil in the week two period, which would be of benefit to producers here. On the temperature side, heat remains limited to far southern Brazil and the majority of Argentina, while the rest of Brazil looks to continue seeing temps that are average to below average.
- US forecasts were again largely unchanged overnight, and continue to feature a rain even for the southern/southeastern US beginning this afternoon and lasting generally through the end of the week. The GFS has shifted the precip on the back side of this system to mostly rainfall, as the narrow strip of the Midwest that was expected to see snows yesterday is now expected to see just rains in today's runs. Week-two precip outlooks continue to show above average chances at rainfall through the majority of the US.
- Temperature outlooks have continued fluctuating past the next 5 days, with the models in poor agreement on how far south cold air aloft in Canada will be able to make it into the US. Generally speaking, the southern third of the country looks to continue seeing temps that are well above average, while areas up both the east and west coasts are also expected to stay above average.