AM Comments February 13 2025
Good morning. Thursday trade in the ag space has started mixed/quiet in the overnight hours, with corn and soybeans slightly lower and the wheat market catching a bid on coming cold weather in both the US and Russia. Overall, we expect choppy trade to largely continue over the next few weeks as the corn market waits to see how many safrinha acres get planted by the end of the month, and the soybean market continues to work through the glut of new crop supply that is coming out of Brazil. There simply isn't a lot of new news otherwise, and the weather situation in Argentina that produced this rally in the first place is stabilizing. The bulls need new ammo to justify pushing values above the recently made highs, and that ammo is unavailable at least to start the day on Thursday. Corn futures this morning are trading 3-4 cents lower, soybean futures are trading 1-2 cents lower, and the Chicago wheat market is trading 3-4 cents higher. Products are mixed, soybean meal is up $1-1.50/ton, and soybean oil is down 50-60 points. Outside markets are also mixed, crude oil futures are down another 80-90 cents/bbl, the Dow Jones index is up 10 points, and the US$ index is down 10 points. The S&P500 is unchanged and the NASDAQ is up 20 points. No new contract highs for gold or coffee so far today.
Today's Reports: Conab February Supply and Demand; Weekly Export Sales; Weekly Jobless Claims; Monthly PPI
- Conab released their February crop production update early this morning; the report showed a surprising monthly drop in soybean production to 166.014 mmt's, while total corn production saw a fairly sizeable 2% increase to 122.017 mmt's. Safrinha production also saw a small adjustment higher to 96.048 mmt's. To view our updated Brazilian production maps, please click here.
- This morning's weekly export sales report for the week ending February 6th is expected to show corn sales in a range of 800k-1.7 mil mt's, soybean sales in a range of 300k-800k mt's, and wheat sales in a range of 200k-600k mt's. 2025/26 corn sales are seen between 0-500k mt's, while wheat sales are seen between 0-75k mt's and soybean sales are seen between 0-50k mt's.
- The Rosario Grains Exchange on Wednesday lowered their estimates of both corn and soy production out of Argentina this year; they lowered their soy estimate to 47.5 mmt's, and lowered their corn estimate to 48 mmt's. Both figures would be below the current USDA estimates.
- Also out of Argentina on Wednesday but not necessarily market moving, was news that the government announced it would be voiding the results of an auction held to dredge the Parana River, after just one company submitted a formal bid for the project. Sources added an investigation into the happenings would be taking place, with the project postponed in the meantime.
- French ag body FranceAgriMer on Wednesday said in a monthly report that soft-wheat exports in the 2024/25 crop year are expected to reach 9.74 mil tons, which is marginally higher than their January estimate; the adjustment also slightly dropped their ending stock estimate to 2.81 mil tons. Corn exports were lowered to 4.57 mil tons, while stocks are seen at 2.76 mil tons.
- Inflation is once again the talk of the equity markets over the past day, as yesterday's CPI reading showed a hotter number than the trade had anticipated; Fed Cahir Jerome Powell, in comments to Congress, seemingly took the data in stride, and added that policymakers would need to see today's PPI reading to get a clearer view of the PCE index, which is the Fed's preferred inflation gauge. Generally speaking, Powell has made it clear in recent days that the Fed is in no hurry to further trim interest rates.
- NOAA's snowfall analysis map shows 24 hour totals reaching 8-12" through parts of SW IA and into N IL and S WI. A bigger chunk of the Plains and western Midwest picked up a more general 1-4". As we mentioned yesterday though, this is not the end of the winter weather as another system is seen working across the western US and through the Rocky's today and into tonight, with additional Midwest snow expected out of this system for Friday night into Saturday.
- Then into next week, a fifth system is expected to follow the same general path, though will maybe favor a slightly more southern bias. Rainfall will be present to the south of all these systems, which looks to produce considerable flooding risk in the southeast/mid-south over the next 10 days. Then, once this fifth system works through, models finally see a slow down in activity, with a drier forecast seen into the weekend of February 22/23. Temps over the next 10 days will be cold to brutally cold through most of the country, with a slightly warmer outlook seen for the western 2/3's of the country into the week of February 24th.
- Nothing new again weather-wise in South America for Thursday, as further thunderstorm activity in southern and south-central Argentina provided rainfall of 0.5-2" on Wednesday. Similar rains worked their way through Uruguay and far southern Brazil, while a pocket in central Brazil also saw up to 1.5 inches of precip; otherwise, the bulk of central Brazil continued to see just light/variable showers.
- Temperature forecasts trended warmer for most of Brazil and Argentina overnight, though the coming rains for Argentina will look to offset some of these conditions there. And in Brazil, the heat will aid in the drying down of soils, which will currently benefit producers. Otherwise, there were no notable changes to the precip forecast for either country in either the short term or into the end of the month.