Written Commentary
CORN
Prices were $.02 ½ – $.03 ½ higher while spreads mixed and little changed. Mch-26 traded to a fresh 3 week high however stalled before reaching the December high at $4.52 ¼. Overall prices remain in a $4.35-$4.55 range. In the week ended Dec. 16th money managers were net sellers of just over 62k contracts of corn flipping their position to net short 52,672 contracts. Index funds sold 6,642 contracts. The BAGE report Argentine corn plantings have reached 78% while adding 96% of the cropland has adequate to surplus soil moisture. Once the Holiday season winds down the markets attention will shift to the Jan. 12th USDA production and WASDE data. Right now no change in usage for ethanol at 5.6 bil. bu. while feed usage likely to be cut 100-200 mil. bu. The wildcard will be US production. In the past 35 years production has been cut from the November est. 65% of the time.
SOYBEANS
Christmas came early as Santa delivered solid gains across the Ag. space in today’s abbreviated trading session. Beans were up $.10-$13, meal was $3-$4 higher while oil was up 75 points. Bean spreads weakened while product spreads were mixed. Spot Jan-26 had a 3rd consecutive session of higher lows and higher highs. Next resistance is the 100 day MA at $10.71. Jan-26 meal traded to its highest level in a week, next resistance is the 50 day MA at $309.20. Jan-26 oil surged late closing at session highs. Spot board crush margins firmed another $.04 to $1.46 ½ bu. with bean oil PV increasing to 44.6%. CFTC data the week ended Dec. 16th showed MM’s net sellers of roughly 33k contracts of soybeans and soybean oil, and 22k meal. In the last 2 weeks MM’s were net sellers of just over 157k contracts across the soy complex, the most over a 2 week stretch in 6 years. Despite the selling MM’s were still long 148k contracts, which we believe is back down to around 142k. Despite the return of China as a buyer of US soybeans it will likely not be enough to prevent the USDA from lowering their export forecast 30-50 mil. bu. in January. Longer term thinking it’s at least 75-100 mil. too high with record production in Brazil a very high probability. History shows 50/50 odds for the direction move of US soybean production change in January.
WHEAT
Prices ranged from $.02- $.06 higher. MIAX futures lagged while CGO and KC were the leaders to the upside. Spreads firmed in KC while a bit weaker in CGO. Mch-26 CGO notched its 5th consecutive higher close without much resistance until the 50 and 100 day MA’s near $5.36. KC Mch-26 futures traded above its 100 day MA however stopped short of its December high at $5.36 ½. Algeria reportedly bought between 500-550k mt of durum in their recent 50k mt tender. The grain is for Feb/March shipment with the price ranging from $315-$325/mt CF depending on vessel size. Lack of progress on peace talks between Russia and Ukraine also providing underlying support. On going bombings have slowed grain trade thru the Black Sea region. US exports at 900 mil. bu. may get a boost in Jan-26 as they are up 22% YOY, vs. the USDA forecast of up 9%. 2026 winter wheat acres likely to fall another 1+ mil. acres from YA.
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