AM Comments February 7 2025
Good morning. Happy Friday. Ag markets are in the red to start the last day of trading this week, but have once again been two-sided so far in the overnight session. As the old adage goes, Fridays are trend days, and aside from intraday bouts of profit taking, we would expect this to largely be the case today despite markets being lower early. Otherwise, the old standby story of profit taking will likely be given as the reason for any decline throughout the day, with the funds still long and there being little change to either of the ongoing stories of tariffs or South American weather in the last 24 hours. Corn futures this morning are trading 2-4 cents lower, soybean futures are trading 6-8 cents lower, and the Chicago wheat market is down 3-4 cents. Products are lower, soybean meal is down $3-4/ton, and soybean oil is down around 5 points. Outside markets are mixed, crude oil futures are up around 40 cents/bbl, and US$ index is up 15 points. The Dow Jones, the S&P500 and the NASDAQ are all trading near unchanged. Gold and coffee are both higher this morning, but have not made new contract highs so far.
Today's Reports: Monthly Nonfarm Payrolls; Monthly Unemployment; CFTC Commitment of Traders
- The Buenos Aires Grain Exchange, in their weekly crop report, showed soybeans in the poor condition increased 4% from last week to 32%, while corn conditions in the poor category also jumped 4% to 26%. Conditions in the normal/excellent category fell 4% to 68% for soybeans and also fell 4% to 74% for corn. There were no production adjustments made.
- Statistics Canada will release updated crop stock estimates this morning at 7:30am central time; the data is expected to show wheat stocks in the country as of December 31st up roughly 2.3 mmt's from last year, while canola stocks are seen 1 mmt lower and barely stocks are seen 800k mt's lower.
- The USDA yesterday, in its Farm Income and Financial Forecast report, said that they expect farmer income in 2025 to be up $41 bil from 2024 to $180.1 bil; this would be the highest level of farmer income since 2022. Notably, the amount of government aid to farmers in the year is seen increasing by more than 350% on an annual basis. Gross income is estimated to be up by 6.5%, while expenses are expected to be down 0.6%.
- Barge shipments down the Mississippi River in the week ending February 1 were down 5.5% on the week to 617k tons according to the USDA; corn shipments in the week were up 22.6% to 374k tons, and soybean shipments were down 31.8% to 225k tons. STL barge freight rates were up $1.12 on the week to $15.88/short ton.
- Traders this morning are attributing a bulk of yesterday's choppy trade to comments out of Jamieson Greer, who is Trump's nominee to be the US Trade Representative, during his confirmation hearing. Like we mentioned yesterday afternoon, Greer touted a universal tariff as a means to alleviate some of the current trade deficit in the US, and also brought up the Phase 1 trade deal with China that was signed in 202 but never adhered to. Trade/tariffs will remain an ongoing market theme into US spring.
- Today's January jobs report will grab a majority of the attention in the equity market world this morning, as economists are looking for possible clues in the data as to what might happen with interest rates going forward. Forecasts show hiring in the month likely slowed to around 170,000, which is down from just over 250,000 in December; the wildfires in CA and frigid cold across a bulk of the country's mid-section through mid-month likely contributed to the slowdown.
- A federal judge on Thursday temporarily blocked Trump's proposed buyout for federal workers until at least Monday; a Monday hearing will be the next step in the process, where another or delay or a more permanent blockage may be possible. More than 60,000 workers had already accepted the buyout offer as of yesterday afternoon.
- Light/scattered precip dotted northern Argentina and into Paraguay and southwestern Brazil through the day on Thursday, with satellite data showing the heaviest totals in a small pocket of southwest Brazil. The bulk of Brazil was mostly dry, which should've allowed for a good day of soy harvest progress. Forecasts for Brazil into next week show this pattern largely continuing, as rainfall over the next 5 days look to fall mostly in the north and northwest. Argentina looks to be on the dry side for another several days, before models continue to show improved moisture beyond February 13th/14th.
- US forecasts through the weekend and into next week remain little changed, with several systems still expected to work through the eastern half of the US over the next 7-10 days, providing rainfall to the south and a mix of rain/snow/ice further to the north where temperatures allow it. By Sunday, warm air will be pushed into just the far southern coastal areas, while the rest of the country looks to turn back cooler through most of the week. Extended range maps are still little changed, and offer above average moisture and generally below average temps for the Midwest into the back third of the month.
- Have a good weekend!