Grain Comments: 12.13.24

Good morning. Happy Friday the Thirteenth. Mostly red ink is seen on the screen to start the last trading day of the week in the ag space this morning. Fresh breaking news overnight was again largely absent, with today likely to be a trend day in the corn and soy markets. Beans are leading to the downside as of this writing, but it will be interesting to see how corn trades through the day today; does further profit taking emerge from technical resistance to drive prices lower into the weekend, or are fund managers encouraged enough by the USDA’s demand boost this week to continue to adding to their already relatively sizeable net-long position? This question likely keys trade through the early part of the day this morning. Corn futures to start Friday are trading a half cent to a penny lower, soybean futures are trading 3-4 cents lower, and the Chicago wheat market is up a half cent to a penny. Products are lower, soybean meal is down $2-3/ton, and soybean oil is trading near unchanged. Outside markets are mostly higher, crude oil futures are up 50-60 cents/bbl, the Dow Jones index is up 60 points, and the US$ index is unchanged. The S&P500 is up 20 points and the NASDAQ is up 160 points. Gold is around $20/oz lower.

Today’s Reports: Monthly Trade Balance; CFTC Commitment of Traders

• The delivery slate to wrap up the week was again rather robust; the CME Group assigned 126 contracts of soybean meal, 122 contracts of soybean oil, 107 contracts of corn, 14 contracts of KC wheat, 8 contracts of Chicago wheat, and 35 contracts of mini Chicago wheat.

• The Buenos Aires Grain Exchange showed corn planting in Argentina had advanced to 55.6% complete over the past week, while soybean planting had advanced to 64.7% complete. Crops remain in good condition, with 99% of the soy crop rated normal or good/excellent, and 97% of the corn crop in the same category.

• Same group showed wheat harvest at 63.9% complete, up 15.8% from last week. The group notably left production unchanged at 18.6 mmt’s following a slight increase by the Rosario Grain Exchang earlier in the week.

• Brazil’s Conab made minor crop adjustments to both the corn and soybean crops on Thursday.

• Along with Conab yesterday, private industry group Abiove also adjusted their estimate of Brazil’s soybean crop higher to 168.7 mmt’s. This is up 1 mmt from their previous estimate, and is up from 153.3 mmt’s of production the year prior. Same group sees soy exports at 104.4 mmt’s, and sees ending stocks at 9.55 mmt’s (nearly double last year).

• Barge shipments down the Mississippi River in the week ending December 7th were seen at 728k tons, down roughly 8% from the week prior. Corn shipments were down 26% at 225k tons, and soybean shipments were up 4% at 489k tons. STL barge rates were up 24 cents on the week to $15.64/short ton.

• According to China’s National Bureau of Statistics, total grain production in the country this year reached a record 706.5 mmt’s, which was up 1.6% from the year prior. Sources familiar said the record harvest was the result of larger than expected rice, wheat, and corn crops from both area increases and good yields.

• Looking ahead to next week in the equity space, interest rate decisions will again be front and center; following cuts in the EU, Canada, and Switzerland this week, as well as a jump in Brazil, next week will feature decisions from not only the US, but also Sweden, Norway, Britain and Japan, as global monetary policy remains near the top of traders’ interest lists. CME’s FedWatch this morning shows a 96.7% chance that the US sees a quarter-percentage point cut next week.

• Weather going into the weekend will be a bit of a mixed bag; heavy snows are likely in the northwest through the Cascade and Sierra-Nevada Mountains while also stretching east into ID and MT. Snows also remain likely in the northeast and on the eastern side of the Great Lakes, but totals will be far less than what has been seen recently. And lastly, models are picking up on a decent snow event for parts of IA/MN/WI, though there is some disagreement on exact location.

• Otherwise, the rain event impacting a corridor through the Midwest and mid-south from TX into IA/IL/IN will be the main forecast feature over the next 72 hours. Models show rainfall of 0.5-1.0″ possible for these areas, with some locally heavier amounts. Warmer temps also look to return over the next 24 hours, with highs into the early part of next week some 10-15 degrees F above average for most of the country’s mid-section.

• Beyond next week, maps for week two remain in good agreement on drier conditions emerging for much of the country through the Christmas holiday, which is raising confidence in their output. Week-two temp maps are less consistent, with the EU AI significantly warmer into the end of the month than the EU or GFS ensembles are through the eastern half of the US.