AM Comments February 10 2025
Good morning. Ag markets are quietly mixed coming out of Super Bowl weekend this morning, with corn and wheat having opened last night with tiny gap-lower starts and the soy complex having traded just below unchanged for the last several hours. Tariff/trade talks look to again dominate headlines from a macro standpoint this week, as President Trump over the weekend announced intentions to apply new 25% tariffs on steel and aluminum imports coming into the US, and pending retaliatory tariffs on a host of nations mentioned last week still loom in the background. Otherwise, the ag world will momentarily turn it's focus to the USDA tomorrow, though WASDE's February report is not expected to be much of a market mover. Corn futures this morning are trading a half cent to a penny higher, soybean futures are around a penny lower, and the Chicago wheat market is up 2-3 cents. Products are mixed, soybean meal is up around $1/ton, and soybean oil is down 10-20 points. Outside markets are mostly higher, crude oil futures are up $1/bbl, the Dow Jones index is up 225 points, and the US$ index is up 20-25 points. The S&P500 is up 30 points and the NASDAQ is up 160 points. Gold futures are up $45/oz and made new contract highs overnight, while coffee futures are also trading higher and made new contract highs for the twelfth consecutive session.
Today's Reports: Weekly Export Inspections
- The CFTC commitment of traders report for the week ending February 4th, released Friday afternoon, showed managed money traders in the week were buyers of 13,495 contracts of corn (now net-long 364,217 contracts), buyers of 535 contracts of soybeans (net-long 57,029), and buyers of 20,340 contracts of Chicago wheat (net-short 90,442). In soy products, funds bought 18,831 contracts of soybean meal (net-short 33,460) and bought 2,448 contracts of soybean oil (net-long 42,215).
- The USDA will release its February WASDE report at 11am central time tomorrow (Tuesday) morning; traders expect corn ending stocks in the report to come in at 1.526 bil bu's, soybean ending stocks to come in at 374 mil bu's, and wheat ending stocks to come in at 799 mil bu's. The wheat figure would be nearly unchanged from last month, while the corn and bean figures would each be down slightly.
- World ending stocks are estimated at 292.52 mmt's for corn, 127.79 mmt's for soybeans, and 258.60 mt's for wheat, which would all be down slightly from January. In South America, traders see both corn and soybean production in Argentina being trimmed slightly but still near 50 mmt's for both crops, and in Brazil, they see corn production also being trimmed slightly but predict a slight increase for soybean production.
- In Brazil, soybean harvest continued to pick up steam over the weekend but remains well behind both last year and average; private consultancy Patria AgroNegocios said on Friday that just under 17% of the crop had been cut compared to 24% on the same day last year. A separate set of weekly data from the Mato Grosso Institute of Ag Economics (Imea) showed soy harvest in the country's largest producing state at just 28.6% complete also as of Friday, compared to 51.5% last year.
- Also of note out of Brazil over the weekend, private consultancy Safras y Mercado on Friday raised their estimate of the country's soy production from 173.7 mmt's to 174.9 mmt's, as more private firms continue to see larger production figures than the USDA. Shipping data out of the Trade Ministry also showed January soybean exports at 1.073 mmt's, which was down more than 60% from last January, while corn exports were down 26% from same month last year at 3.594 mmt's.
- Aside from the afore mentioned tariff talk on steel and aluminum imports, US financial markets look to get off to a mostly quiet start this week, as the data slate for Monday is largely lacking anything of note. Fed Chair Powell is scheduled to give testimony over the course of Tuesday and Wednesday, while economists will be tuned in to mid-week inflation data that is expected to remain unchanged from last month.
- As we hinted at throughout the week last week, convective thunderstorm activity in southern Argentina provided better-than-expected rainfall over the last 72 hours; areas from Cordoba to Buenos Aires and south picked up anywhere from trace amounts to a half inch generally speaking, with a few small pockets of locally heavier precip. Northern Argentina through Paraguay and into southern Brazil picked up similar totals, with mostly light/spotty rains through the bulk of Brazil allowing for an uptick in harvest activity.
- Forecasts for this week were mostly unchanged over the weekend, and continue to offer an improving pattern for both Brazil (drier) and Argentina (wetter) beyond mid-week. And week two forecasts this morning still show more of the same, which as La Niña is still expected to fade into the end of the month, will be monitored going forward. Keep in mind that there likely remains some measure of weather premium in the markets, and forecasts are improving.
- The US Midwest forecast this week remains active, with a pair of storm systems expected to provide heavy precip to the broader eastern half of the US. Models have shifted the snow track several times in the past 48 hours; this morning, models show the first system staying mostly to the south, while the second system at mid-week is expected to track further north. The GFS shows a wide swath from KS to the Great Lakes receiving possibly 3-6" Wednesday/Thursday.
- Week-two forecasts over the weekend did finally take a shift drier for most of the country, with the wettest conditions now expected in the northwest and the southeast. Most of the Midwest looks to see average to slightly below average precip in the period, while temps are expected to remain largely below average east of the Rocky Mountains. How this pattern evolves this week will be monitored.