Written Commentary
CORN
Prices were steady to $.04 higher today led by old crop futures. Spreads also firmed. Mch-25 once again was not able to pierce key resistance is at the 100 week MA at $4.80. Ethanol production slipped to 1,095 tbd, or 322 mil. gallons, down from 324 mil. the previous week however up 3.9% YOY. Production was in line with expectations and above the pace needed to reach the USDA corn usage est. of 5.50 bil. bu. There was 111 mil. bu. used, or 15.8 mil. bu. per day, well above the 14.9 mbd needed to reach the USDA. In the MY to date there has been 2.031 bil. bu. used, or 15.38 mbd, an annualized pace of 5.615 bil. Stocks jumped to a 9 month high at 25.0 mil. barrels, however below the 25.7 mb from YA. The current pace will have to slow significantly or corn usage will work higher. Implied gasoline usage fell 2% LW to 8.325 mbd, however was still up .7% over YA. Brazilian exports are expected to reach nearly 3 mmt in Jan-25, just above the 2.9 mmt shipped in Jan-24. Export sales tomorrow are expected to range between 20-40 mil. bu.
SOYBEANS
Prices closed mostly lower with beans down $.05-$.10, meal was $4 lower while oil was mixed. Spreads were firmer across the complex. Mch-25 beans slipped late as Brazilian basis levels continue to collapse however production uncertainties in Argentina provide underlying support. Mch-25 meal broke below yesterday low, next support at the 50 day MA near $300. Mch-25 oil for now rejected trade above $.47 lb. Not much resistance on the chart until the Nov-24 high at 49.38. As the weekend approaches, model runs continue to lower rain amounts and overall coverage for Central Argentina, however cloud cover and reduced temperatures will provide some relief. Longer range models offer better prospects for rain late next week and weekend. Southern Brazil is more likely to see beneficial rains in the near term. Central and northern growing regions of Brazil remain in a normal to above normal rainfall pattern keeping early soybean harvest at a slower than normal pace. Brazilian soybean exports are expected to reach 2.2 mmt in Jan-25, slightly above the 1.7 mmt shipped in Jan-24. Meal shipments are expected to reach 1.80 mmt, up 26% YOY. NOPA crush in Dec-24 at 206.6 mil. bu. was a new all-time high and up 7% from November. Despite higher than expected crush figures, bean oil stocks were slightly below expectations at 1.236 bil. lbs. up from 1.084 at the end of Nov-24. Spot board crush margins slipped $.03 today to $1.30 ½ while bean oil PV increased to 43.4%. Export sales tomorrow are expected to range from 10-30 mil. bu. for beans, 100-300k tons of meal and 5-40k tons of oil.
WHEAT
Prices ranged from steady to $.03 across the 3 classes today. Mch-25 Chicago futures again failed to trade above its monthly high at $5.52 ¾. The 50 day MA resistance is just above that at $5.54 ¼. KC Mch-25 closed right at its 50 day MA. While better opportunities for moisture in the US southern plains exist in the longer range model, in the short term look for drought conditions to expand. Much of the continental US holds in a cooler than normal pattern the next 2 weeks. Above normal temperatures are expected for the Black Sea region over the next few weeks keeping the potential for winterkill at a minimum. Markets await updated production forecasts from ABARE in Australia while the USDA held their forecast unchanged at 32 mmt last Friday. Tomorrow’s export sales are expected to range between 5-15 mil. bu.
Charts provided by QST.
>>See more market commentary here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
