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Ag Market View for Jan 16.25

CORN

Prices were $.04-$.06 lower however nearby spreads firmed on the price weakness.  Ag. prices were sharply lower today as markets appear to be gaining confidence the potential for production losses in Argentina may be minimal or offset with higher production in Brazil.  Recent hot/dry conditions in Argentina led the Rosario Grain Exchange to lower their production forecast to 48 mmt, down from the previous range of 50-51 mmt, vs. the USDA est. of 51 mmt.  Exports at 40 mil. bu. were at the high end of expectations.  YTD commitments at 1.585 bil. up 28% from YA, vs. the revised USDA forecast of up 7%.  Commitments represent 65% of the of the USDA forecast, above the historical average of 58%.  Korea and Japan bought 11 mil. with 9 mil. sold to Mexico.  There were cancellations of 16 mil. to unknown.  In addition the USDA announced the sale of 135k mt (5.3 mil. bu.) of corn to Taiwan.  Algeria is reportedly tendering for 240k mt of SA feed grade corn for February shipment.  This tender closes tomorrow.  The BAGE reports Argentine corn plantings have advanced to 95%.  Crop ratings fell from 42% G/E to 39% given the recent hot/dry pattern.  14% of the crop is rated poor/VP, up 5% from the previous week.  

SOYBEANS

Prices were sharply lower across the complex with several contracts closing near session lows.  Beans were down $.20-$.23, meal was $5-$7 lower while oil was off more than $.01.  Spreads weakened as meal spreads made new lows.  Mch-25 beans finished below its 100 day MA as prices made new lows into the close.  Next support is the 50 day MA at $10.02 ¾.  Mch-25 meal broke below LW’s low with next support not until the contract low just above $285.  Mch-25 oil weakened into to close finishing a few ticks above $.45 lb.  Spot board crush margins slipped $.06 ½ to $1.24 bu. while PV’s were little changed.  Today’s maps suggest a more unsettled forecast with several chances of rain events across dry areas of Argentina and Southern Brazil thru month-end.  Rains across the central and northern growing regions of Brazil appear to be less frequent in week 2 of the outlook.  We are also 1 day closer to the 2nd Trump Administration and the potential for higher tariffs with China and other key trading partners.   Bean exports at 21 mil. bu. were in line with expectations.  YTD commitments at 1.502 bil. are up 9% from YA vs. the USDA forecast of up 8%.  Commitments represent 82% of the USDA forecast, above the historical average of 80%.  There were net cancellations of 16 mil. bu. to China/unknown.  Combined commitments stand at 840 mil. with outstanding sales at 211 mil., below the 337 mil. from YA and 373 mil. in 2023.  The USDA also announced the sale of 132k mt (4.8 mil. bu.) to China.  Meal sales at 144k tons were below expectations.  YTD commitments are up 14% from YA, vs. USDA up 8%.  Bean oil sales at 57k mt (126 mil. lbs.) were above expectations.  YTD commitments at 1.447 bil. lbs. already represent over 90% of the revised USDA forecast of 1.60 bil.  The BAGE reports Argentine plantings have reached 98% while crop ratings plunged this past week.  32% of the crop is rated G/E, down from 49% LW.  21% of the crop is rated poor/VP, up from only 8% LW.  AgroConsult raised their Brazilian soybean production forecast .2 mmt to 172.4 mmt vs. the USDA est. of 169 mmt. 

WHEAT

Prices were $.06 to $.09 lower across the 3 classes today.  With the pullback Mch-25 contracts are all near the midpoint of their respective trading ranges this month.  Little to no moisture is expected for the WCB and plain states over the next week while much of the continental US holds in a much cooler than normal pattern the next 2 weeks.  Little change with this week’s US drought monitor. Exports at 19 mil. bu. were above expectations and bring YTD sales at 644 mil. bu. up 9% from YA, vs. the USDA forecast of up 20%.  Commitments represent 76% of the USDA forecast vs. the historical average of 78.5%.  By class commitments to date vs. the revised USDA forecast are HRW up 46% vs. USDA up 57%, SRW down 41% vs. down 21%, HRS up 9% vs. up 15% and white up 46% vs. up 45%.  Japan’s Ag. Ministry bought nearly 133k mt of wheat which included nearly 26k mt of US HRW and just over 22k mt of US durum.  SovEcon reports they expect Russian wheat exports to slip to roughly 2 mmt in Jan-25, down from 3.6 mmt YA.  They are forecasting 24/25 MY exports at only 43.7 mmt, well below the USDA est. of 46 mmt.              

Charts provided by QST.

 

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