AM Comments February 12 2025
Good morning. Choppy trade has resumed at the CBOT post the USDA's February WASDE report, with corn and soybean futures each seeing two sided price action again to start Wednesday. Overnight news remains light, as traders have turned their focus back to the South America growing season and what the next social media salvo from President Trump might be regarding trade and tariffs. From a price standpoint, $5 and $11 will continue to be seen as stiff upside resistance unless/until larger losses are confirmed via combine data in Brazil and Argentina; support will also be fairly close-by on the downside, which we see as leaving the trade rangebound over the short term. Corn futures at mid-week are trading 1-2 cents lower, soybean futures are trading 6-8 cents lower, and the Chicago wheat market is trading 3-4 cents lower. Products are lower, soybean meal is down around $2/ton, and soybean oil is down 20-25 points. Outside markets are also mostly lower, crude oil futures are down 60-80 cents/bbl, the Dow Jones index is down 375 points and the US$ index is unchanged to up 5 points. The S&P500 is down 50 points and the NASDAQ is down 200 points. No new contract highs for gold or coffee so far this morning; gold gapped lower last night and is currently down around $30/oz.
Today's Reports: Monthly CPI/Inflation; EIA Weekly Ethanol Production/Energy Stocks
- Yesterday's February WASDE report was largely a non-event for US corn and soybean markets, as the USDA made no adjustments to the balance sheet for either crop. Most notable in the report was a 3 mmt cut to soybean production in Argentina, and also that Brazil soybean production was held unchanged at 169.0 mmt's. To view our full report snapshot, please click here.
- Brazil's Conab will be out with their February supply and demand update tomorrow (Thursday); traders expect soybean production to come in slightly higher than last month at 168.2 mmt's, while total corn production is seen coming in just slightly higher from last month at 120.1 mmt's. Private forecasters have been trimming corn production estimates due to latent seeding pace in recent days, and we would not be surprised if Conab also makes this adjustment. The report will be out at 6am central time.
- This morning's weekly ethanol production report for the week ending February 7th is expected to show average daily production in the week between 1.054-1.090 mil bbls, while stocks for the week are estimated between 25.830-26.542 mil bbls.
- Weekly export data from the European Commission shows EU wheat exports as of February 9th at 13.0 mmt's for the current marketing year, compared to 20.4 mmt's through the same day last year. Corn imports are seen at 12.4 mmt's, which is up roughly 6% on the year. Data remains incomplete for several countries dating to the beginning of the 2023/24 year.
- Monthly data from the Malaysian Palm Oil Board shows stocks of palm oil in the country in January totaled 1.58 mil tons, which was down more than 7.5% from December. Production totaled just 1.24 mil tons, which was down nearly 17%. Exports were down 13% at 1.17 mil tons, and imports surged to 88.5k tons, which was up more than 130%. Meanwhile, Indian veg oil imports in January were down 15% on the month to 1.05 mil tons.
- Focus in the financial world at least to start Wednesday will be on this morning's monthly inflation update, which traders and economists expect to be unchanged from last month on annual basis at 2.9%; core inflation, however, is seen dropping by 0.1% to 3.1%. Attention will then turn to Fed Chair Powell's wrap-up remarks to Congress this afternoon, which will presumably include comments on the morning data release.
- Elon Musk made a surprise visit to the White House on Tuesday to be present for and take questions regarding President Trump's new order to Federal agencies to work closely with Musk on cutting costs. Musk's general message was that an "autonomous federal bureaucracy", which he views as a de facto fourth branch of the US government and is fighting against, is unconstitutional and goes against the wants of the American public.
- Good rains returned to southern Argentina on Tuesday, with continued thunderstorm activity providing 0.5-1" of rainfall generally speaking to an area south of Rosario and west of Buenos Aires. Similar rains worked their way into southern Brazil, while south-central Brazil and east continued to see just light/spotty precip. Better rains were seen in northwest/north-central Brazil.
- Forecasts overnight have expanded light precip potential further south a bit into central Argentina over the next 3 days, while areas to the north are still expected to also see improved moisture. There were no updates to the extended forecasts, with maps out through February 26th continuing to show good rain chances through most of Argentina and southern Brazil, while central Brazil still sees a drier forecast into the end of the month.
- Midwest US weather focus today will be on a winter storm system that is tracking north and east out of the southern/south-central Plains that is expected to bring potentially heavy snowfall to a wide swath of the central and northern Midwest through the day today and into tonight. Models have reduced accumulation amounts over the last 24 hours, but still see the possibility at 2-5" for an area from KS/NE to MI and the Great Lakes. Further south, rainfall of a half inch to 1.5" is expected for LA over into the Carolina's over the next 24 hours.
- Extended forecasts again were little changed on the precip side and continue to offer a drier outlook for most of the country, but the EU AI model's temp forecast did take a cooler shift for the eastern half of the country overnight, and is now in better agreement with the ensemble solutions seen yesterday and Monday.