Written Commentary
CORN
Prices were mixed as spreads gave up some ground today. Mch-25 traded to a fresh 2 month high today however failed to take out the Oct-24 high at $4.52 ¼. Price ultimately closed back below $4.50 on a reported pick up in US farmer selling. Ethanol production rebounded 317 mil. gallons, up from 315 mil. the previous week and up less than 1% from YA. Production was in line with expectations and above the pace needed to reach the revised USDA corn usage est. of 5.50 bil. bu. There was 109 mil. bu. used, or 15.56 mil. bu. per day, well above the 15.0 mbd needed to reach the USDA. If LW’s pace held over the last 38 weeks of the MY, corn usage would reach 5.648 bil. bu. Ethanol stocks fell to 22.65 mil. barrels, above the 22.1 mb from YA, however below expectations. Implied gasoline demand last week increased 1% to 8.810 tbd, however was down .6% from YA. Global corn stocks/use among major exports fell from 9.4% in Nov-24 to only 8.4% in Dec-24, the lowest in 5 years. EU corn imports for the 24/25 MY thru Dec. 8th have reached 8.83 mmt, up 10.5% from YA. US export sales tomorrow are expected to range from 45-75 mil. bu.
SOYBEANS
Prices were mixed in choppy 2 sided trade. Beans were $.01-$.04 higher, oil was down 20-30, while meal was steady to $1 lower. Spreads were weaker across the complex with spot meal spreads falling to new lows. Jan-25 beans once again traded above $10, however were not able to make a new high for the week or challenge its 50 day MA resistance at $10.04 ½. Early pressure was driven by lower basis levels in Brazil as confidence grows yields may challenge their record high from 2 years ago. Jan-25 bean oil rejected trade below its 100 day MA at 42.35. Overhead resistance rests at the 50 day MA, currently 43.70. US bean oil demand should remain strong as it is among the cheapest vegetable oil in the global marketplace. That said however its gap with palm oil has narrowed with PO down 2% overnight. Inside trade for spot meal as Jan-25 consolidates just above $290 per ton. Spot board crush margins slipped $.06 to $1.11 ½ bu. with bean oil PV holding just above 42%. Recent rains that produced isolated flooding in Southern Brazil, particularly Parana, have cleared out. Additional rains this weekend may trigger additional flooding concerns. Net drying is expected for Argentina over the next week to 10 days. Although current moisture levels support planting and early crop development, follow up rains will be needed in late Dec-24 or early Jan-25 to keep production prospects high. Conab will be out tomorrow AM with their updates on Brazil’s crop production. Argentine crop updates are expected tomorrow afternoon. EU soybean imports as of Dec. 8th have reached 5.67 mmt, up 11% from YA. Their meal imports at 8.74 mmt are up 31%. Global soybean stocks/use among leading exporters were little changed from Nov-24 holding just below 22%. Export sales tomorrow are expected to range from 55-80 mil. bu. for soybeans, 175-400k tons for meal, and 10-80k for oil.
WHEAT
Prices were steady to $.02 higher across all 3 classes today. Spot Mch-25 contracts reached fresh 3 week highs for all 3 classes. A surge of cold temperatures is expected across the central US the next 2-3 days before a rapid warmup this weekend. Little to no precipitation for the plain states or WCB into mid-month. A mix of rain and snow is expected to bring some drought relief to Eastern Ukraine, Southern Russia and Kazakhstan over the next week to 10 days. A few days of extreme cold this weekend will likely not damage winter crops. IKAR analysts are suggesting Russian farmer may shift up to 1 mil. HA of acres away from wheat and into oilseeds in 2025 as a result of weak margins growing wheat. IKAR suggests Russian wheat exports will fall between 3.3 – 3.5 mmt in Dec-24, down from 4.1 mmt in November largely due to higher export taxes. EU soft wheat exports as of Dec. 8th at 10.24 mmt are down 29% from YA. Global stocks/use among major exporters was little changed from Nov-24 holding steady at 13.4%, nearly a 2 decade low. While tight should limit the downside, so far wheat has lacked a spark to ignite a short covering rally. Export sales tomorrow are expected to range from 10-20 mil. bu.
All charts provided by QST.
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