AM Comments February 14 2025
Good morning. Happy Friday. Ag futures are higher to start Friday morning trade, though we are unable to pinpoint a specific reason why as of this point. Though snow pack has improved in US wheat country recently, we assume some measure of short covering is going on here heading into the weekend, with brutally cold temps still in the forecast for the US, and temps in Russia's wheat areas below average. In the case of corn and beans, it could be that traders are optimistic on the trade front; Vice President Vance seemingly had constructive talks with leaders of the EU yesterday, and Trump's reciprocal tariffs again seem more like a bargaining chip than an economic weapon as a proposed start date of April gives nations time negotiate. For the corn market specifically, spot prices are right back near the recent highs and also the $5 level, which makes Friday trade particularly important from a technical standpoint. Corn futures this morning are trading 3-4 cents higher, soybean futures are trading 6-8 cents higher, and the Chicago wheat market is up 10-12 cents. Products are higher, soybean meal is up $2-3/ton, and soybean oil is up 30-40 points. Outside markets are mixed, crude oil futures are up 50-60 cents/bbl, the Dow Jones index is down 100 points, and the US$ index is down 40 points. The S&P500 is down 10 points and the NASDAQ is down 25 points. Gold futures are higher but have not made new contract highs, and coffee futures are lower and have also not made new contract highs.
Today's Reports: Monthly Retail Sales; CFTC Commitment of Traders
- The Buenos Aires Grain Exchange yesterday, in a weekly report, showed soybean conditions in the poor category increased another 4% from the week prior to 36%, while corn in the same category increased 7% to 33%. There were no production estimate adjustments made, while soil moisture conditions in the optimal category remained around 60% for both crops. It will be interesting to see next week what recent/coming rains will do to conditions.
- The National Oilseed Processors Association (NOPA) will release soybean crush data for the month of January on Tuesday; the report is expected to show crush in the month at 204.536 mil bu's, which would be down 1% from December's all-time record, but up 10% from January of last year. Stocks of soybean oil held by NOPA members as of January 31 are estimated at 1.289 bil lbs, compared to 1.236 bil in December and 1.507 bil last January.
- According to sources familiar with the matter, Indonesian fuel retailers have cleared their stocks of B35 palm-oil based biodiesel, and the government sees full implementation of B40 by March after an initial January 1 start date was delayed due to regulatory issues. A source from the country's energy ministry said no further delays were expected. The government has allocated 15.6 mil kiloliters of of biodiesel for distribution in 2025, compared to 13.0 mil kl last year.
- Staying on the biofuels theme, Malaysia's deputy commodities minister told reporters on Thursday that the country would be reviewing its standards and policies governing UCO (used cooking oil) following investigations by western governments into shipments containing virgin oil. The source added that ensuring the traceability of the entire supply chain was the number one issue affecting exporters.
- According to the USDA, barge shipments down the Mississippi River in the week ending February 8th totaled 623k tons, which was up 1% from the week prior; corn shipments were down 14% at 323k tons, and soybean shipments were up 14% at 257k tons. STL barge rates were up $2.99 on the week to $18.87/short ton.
- As we mentioned yesterday, Trump touched on all sorts of topics with reporters at the White House; reciprocal tariffs, BRICs, the Russia/Ukraine war, defense spending, and DOGE, were among some of the topics. In his meeting with Indian Prime Minister Modi, Trump also said the two countries had agreed to start talks aimed at a new trade deal, with India promising to take more US oil, gas, and military equipment. Through the weekend, a resumption of hostage exchanges in Gaza between Hamas and Israel tomorrow will presumably be the main flash point.
- US weather forecasts going into the weekend were little changed over the last 24 hours; the eastern half of the country looks to continue to see winter storm activity through the weekend and into next week, with the most severe weather over the next 72 hours seemingly being forecast for the northeast and areas east of the Great Lakes. Coldest temps will be felt the first half of next week, with highs in the single digits at best through most of the Midwest. By the end of next week, models still show a shift to a drier weather pattern for most of the country, while temp forecasts into the end of the month continue to show a return to warmer weather.
- Steady rains were observed through northern Argentina and southern Brazil on Thursday, with satellite data estimating totals in a range of 0.1-1" generally, with some locally heavier amounts. Central and east-central Brazil were again largely dry, with just spotty showers again observed through most of the growing areas.
- No updates to the forecast here either into next week, as this new pattern shift looks to remain in place through at least the next 10 days, while week two forecasts are even trending drier for most of Brazil's growing areas. Safrinha corn will need additional moisture between now and April, but for now, a hot and dry forecast will benefit producers here and is of zero concern.
- Have a good weekend and stay warm! As a reminder, there are no markets on Sunday night or Monday for the President's Day holiday. Trade will resume at 7pm central time on Monday evening, with a normal day of trading on Tuesday.