PM Comments January 30 2025
Good afternoon. Turn-around-Thursday in the ag space today, as corn, soybeans and meal largely gave back what they gained on Wednesday on a continued lack of fresh market-altering fundamental news. Forecasts in Argentina remain drier than on Monday, but it seems the speculative buying has potentially dried up for the week which may cause similar trading to unfold on Friday.
CH closed Thursday at 4.90 1/4, down 6 and 3/4. CK was down 6 cents at 5.01 1/2. Inside day for both. SH finished at 10.44, down 16 and 1/2 cents. SK closed at 10.59 3/4, down 15 and 1/2. WH was up 4 cents at 5.66 1/2. Highest trade since November for WH. Products were mixed, March soybean meal closed at 304.70, down $5.10/ton, and March bean oil closed at 44.98, up a single point. Inside day for meal also. Livestock markets were mixed, February live cattle closed at 204.47, down $2.55, March feeders closed at 273.20, down $2.07, and February hogs closed at 84.37, up 47 cents. Another new high for the week in hogs. Outside markets are mixed/higher, crude oil futures are up 30-40 cents/bbl, the Dow Jones index is up 200 points, and the US$ index is up 10 points. The S&P500 is up 30 points and the NASDAQ is up 120 points.
Spreads ended Thursday mostly lower; corn spreads were down 3/4 of a cent to down 4 and a quarter, and soybean spreads were down a penny to down 6 and 1/2 cents. CH/CK closed at -11 1/4, down 3/4 of a cent, and SH/SK closed at -15 3/4, down a penny. New low for the move in CH/CK at -11 1/4, and new low for the move in SH/SK at -16. New contract low in the SK/SN at -15.
We will refrain from spending all of today's wire talking about tariffs and Argentine weather, as we have done so all week and there is not a lot new to add ahead of February 1 on Saturday. These remain the 2 most dominant, tangible, themes in the ag space, but until we see whether any headlines emerge this weekend, its tough to determine whether the outcomes will be bullish or bearish and therefore tough to determine which way to position. The one thing we will add in regards to Argentina is be careful with the media's portrayal of drought conditions in a country that is nearly 2,400 miles long. NDVI data (normalized difference vegetation index) shows that in just Cordoba and Buenos Aires (southern Argentina), vegetative health is actually near the average level of the last 20+ years, and well is above average in Cordoba alone; when you include the northern growing regions, values drop well below average. However, Cordoba and Buenos Aires combined account for more than 60% of annual corn and soybean production, illustrating how just looking at nation-wide condition levels may be misleading.
What limited new news there was in the space on Thursday included the regular weekly export sales report for the week ending January 23rd, which showed another decent week of corn sales and a poor week of soybean sales. Corn sales in the week totaled 1.359 mmt's, with featured buyers being Japan (493,100 mt's) and Mexico (426,900 mt's); unknown destinations assigned out/canceled/rolled 482,500 mt's. Soybean sales in the week totaled 438k mt's, with featured buyers being China (145,300 mt's), Spain (66,300 mt's), and the UK (66,000 mt's); unknown destinations assigned out/cancelled/rolled 124,300 mt's. Lastly, wheat sales for the week totaled 456k mt's, with featured buyers being the Philippines (86,200 mt's) and Korea (70,500 mt's); unknown destinations were buyers of 85,300 mt's in the week. Corn sales are now up 28% from last year, soybean sales are up 12%, and wheat sales are up 8%. Of note, meal sales in the week exceeded trade expectations at 410k mt's.
Otherwise, forecasts for South America and the roughly two week delay in soybean harvest/safrinha corn planting in Brazil remain the 'talk of the town' in corn and bean markets. Forecasts at mid-day added back some moisture in southeast Argentina in the week-one period, but otherwise remain largely unchanged from Wednesday's output. Brazil looks to remain wet in the same time period, but extended range outlooks from multiple services continue to advertise a pattern shift beyond mid-February as La Niña subsides. Temps will be warmer than average through most of Argentina over the next week, but extreme heat remains absent from the forecast; temps in Brazil look to be average to slightly below average.
US forecasts the rest of the week and into the weekend are little changed from this morning; a cut-off low has continued working north and east out of Texas, providing rains to the mid-south and the southern part of the Midwest, while there remains good agreement on another atmospheric river event bringing heavy rain and snow to parts of California, Oregon, Washington and the broader PNW. Back to the east, models are still showing the chance of a transition to ice/snow later this evening/tonight for parts of the northeast, but again, exactly where tis occurs will be difficult to forecast. Temps look to continue running well above average through the weekend before cooler air creeps into the northern part of the country the first part of next week. Week-two precip outlooks remain little changed, and offer average to above average precip chances to the majority of the country through February 13th.