AM Comments January 30 2025
Good morning. Mostly lower markets this morning at the CBOT, with corn, soybeans and wheat all backing and filling a bit following Wednesday's sharp move to the upside. It will be interesting to see what kind of trade unfolds the next two days ahead of the weekend, with Saturday's February 1 tariff deadline continuing to loom in the background and the funds presumably the longest they've been in many months. We would assume some measure of profit taking emerges between now and then, but should March corn futures clear the $5 mark at any point in the next two days, that assessment becomes more questionable as its hard to say if the bulk of the resting orders above here are farmer sell orders or managed money buy-stop orders. Corn futures this morning are trading 2-3 cents lower, soybean futures are trading 6-10 cents lower, and the Chicago wheat market is around a half cent lower. Products are lower, soybean meal is down $2-3/ton, and soybean oil is down 50-55 points. Outside markets are mixed/quiet; crude oil futures are down 10-15 cents/bbl, the Dow Jones index is down 75 points, and the US$ index is near unchanged. The S&P500 is up 10 points and the NASDAQ is up 110 points.
Today's Reports: Weekly Export Sales; Weekly Jobless Claims; Q4 GDP/PCE
- This morning's weekly export sales report for the week ending January 23rd is expected to show corn sales in a range of 850k-1.8 mil mt's, soybean sales in a range of 450k-1.7 mil mt's, and wheat sales in a range of 150k-500k mt's. 2025/26 wheat sales are estimated between 0-50k mt's, while there are no sales expected for 2025/26 corn or beans.
- We mentioned yesterday that Russian Ag Minister Oksana Lut had lowered export projections for the Russian wheat crop in the coming season; Lut, who was speaking at an agronomic conference, later added that the condition of the wheat crop was seen at 82% in either the 'good' or 'satisfactory' category. Interestingly, this compares to a private estimate in December of just 62% of the crop graded in the same categories.
- Sources familiar with the matter say that a cargo of soymeal from Louis Dreyfus Co. that was originally destined for export at the Paranagua Port was returned to a local processor on Wednesday due to impurities. It is assumed this is one of the truck loads mentioned in recent days that was found to have sand in it. Spokespeople from LDC had declined to comment on the matter as of this writing.
- Reuters on Wednesday reported that Phyllis Fong, the former inspector general for the USDA, had been escorted out of her office by security guards after refusing to comply with her firing by new President Donald Trump. Fong's was one of 17 federal positions that were terminated by Trump last Friday.
- While the US held interest rates steady on Wednesday, the Bank of Canada expectedly trimmed their benchmark lending rate by a quarter-percentage point, while an equal move is expected out of the European Central Bank this morning. Otherwise, equity markets in the States will have their attention on this morning's fresh GDP data for Q4, which is expected to show a full-year advance in 2024 of 2.8%; this compares to 2.9% in 2023.
- Other non-market specific headline news on Thursday includes reports that an American Airlines passenger jet with 64 people on board collided in air with a US Army Blackhawk helicopter near Regan National Airport in Washington DC early last night; reports say the helicopter was carrying three soldiers, and was on a training mission. There is no official death toll this morning, but an NBC affiliate in Washington earlier reported that more than 30 bodies had been recovered from the Potomac River.
- Forecasts for Argentina on Thursday now feature nearly complete dryness across the country over the next 5 days, before a small pocket of rain is seen showing up near Buenos Aires towards the end of the week one period. The week two forecast stuck with better rains in the northern part of the country and into southern Brazil and Uruguay, but confidence in this output today is lacking.
- In Brazil, forecasts continue to show regular rains throughout all but the far southern growing regions over the next week, before a drier pattern is forecast for central and east-central regions in the week two period. Like in Argentina, the presence of La Niña is keeping confidence low in any forecast beyond a few days. We continue reiterating that the next 3-4 weeks of weather in both countries are crucial.
- In the US, a cut-off low will pull moisture from the Gulf into the southern part of the country and southeast through the day on Thursday, making its way into the northeast through the day on Friday. Models do see a bit of snow/ice possible on the back side of this system into Friday afternoon/evening, but this will be largely temperature dependent and hard to predict. On the opposite side of the country, heavy rain and snow returns to the PNW by tonight and looks to last into next week.
- Week two precip outlooks are in better agreement this morning than yesterday, and show well wetter than average conditions through the eastern half of the country, while the rest of the US besides the border with Mexico is expected to see average to slightly above average precip. Temperature outlooks in the same period though have diverged a bit, with the ensembles now being cooler than the EU's AI output for the central part of the US. Short term temp outlooks remain unchanged.