Written Commentary
CORN
Prices were $.03-$.05 lower today giving back much of this week’s gains. Spreads also weakened as Mch/May widened back out to $.07 ½ after peaking at $.05 late last week. We had speculative traders net buyers the past 5 sessions (until today) extending their long position back over 135k contracts, which would be the largest since Feb-2023. Exports at 37 mil. bu. were below expectations and an 11 week low. YTD commitments at 1.383 bil. are up 29% from YA, vs. the revised USDA forecast of up 8%. Current commitments represent 56% of the USDA forecast, above the historical average of 51%. Noted buyers were Columbia – 10 mil. and Mexico – 8 mil. Time will tell if Mexico/unknown were loading up in 2024 ahead of potential tariffs under President Trump’s 2nd term, or if demand to our neighbors to the south remain strong. Current commitments to Mexico at just under 550 mil. bu. are a record high, above YA 508 mil. Historically Mexico’s commitments in early Dec. represent 60% of the MY total. The highest in the past decade was 65%. If current commitments represent 65% of their US imports, Mexico’s imports in 24/25 would reach 840 mil. bu., just below the 856 mil. from 23/24. YTD commitments to unknown at 300 mil. bu. are more than double YA. Conab lowered their Brazilian corn production forecast slightly to 119.6 mmt, well below the USDA est. of 127 mmt. The Rosario GE held their Argentine est. between 50-51 mmt, vs. the USDA forecast of 51 mmt.
SOYBEANS
Prices were mixed and little changed for the day. Beans closed within a penny of unchanged, meal was down $1-$2, while oil was up 20-30 in choppy 2 sided trade. Jan-25 beans have been unable to close back above the $10 level with overhead resistance near $10.03. Jan-25 bean oil rejected trade below $.42 overnight while recovering back above its 100 day MA at 42.32. Overhead resistance rests at the 50 day MA, currently 43.68. Jan-25 meal continues to consolidate near $290 per ton as nearby spreads made fresh lows. Spot board crush margins slipped another $.01 to $1.10 ½ bu. with bean oil PV rebounding to 42.4%. Conab raised their Brazilian production est. slightly to 166.2 mmt, just below the USDA est. of 169 mmt. Abiove raised their forecast 1 mmt to 168.7 mmt while also raising their export forecast to 104.4 mmt, just below the USDA est. of 105.5 mmt. The Rosario GE held their Argentine est. between 53-53.5 mmt, vs. the USDA forecast of 52 mmt. The BAGE is expected to be out this afternoon with their crop updates. Bean exports at 43 mil. bu. were below expectations and bring YTD commitments to 1.370 bil. up 12% from YA vs. the USDA forecast of up 8%. China/unknown combined to buy only 7 mil. bu. bringing commitments to 837 mil. bu. vs. 843 mil. YA. In addition, the USDA announced a new sale of 334k mt (12.2 mil. bu.) to unknown. Soybean meal sales at 176k tons were below expectations. YTD sales are up 12% from YA, vs. USDA up 8%. Soybean oil sales at 64k mt (141 mil. lbs.) were in line with expectations. YTD commitments at 1.059 bil. lbs. are already approaching the revised USDA forecast of 1.10 bil. lbs. for the 24/25 MY. Obviously the USDA expects a big slowdown in oil sales next year.
WHEAT
Prices were $.04-$.06 lower across all 3 classes today. A dryer than normal pattern is expected for Australia allowing wheat harvest to move along smoothly. A layer of snow is expected to form over Eastern Ukraine, Southern Russia and Kazakhstan the next few day’s protecting winter crops from damaging cold late this weekend and early next week. Exports at 11 mil. bu. were at the low end of expectations. YTD commitments at 582 mil. bu. are up 9% from YA, vs. the revised USDA forecast of up 20%. Commitments represent 69% of the USDA forecast vs. the historical average of 71%. By class sales vs. USDA forecast are HRW +47% vs. USDA +64%, SRW –40% vs. -21%, white +43% vs. +38% and HRS +12% vs. +15%. Conab lowered their Brazilian wheat production forecast slightly to 8.06 mmt, in line with the USDA. The Rosario GE raised their Argentine est. .5 mmt to 19.3 mmt, well above the USDA forecast of 17.5 mmt. Saudi Arabia has tendered for 595k mt of wheat for Feb-25 thru April-25 shipment. Offers for the tender are due tomorrow. While tight global inventories among exporters should limit the downside, so far wheat has lacked a spark to ignite a short covering rally.
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