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BQC Afternoon Comments Feb 04.2025

CLOSING COMMENTS

Geopolitics: The US Secretary of State Marco Rubio recently took a trip down to Panama, and immediately following his trip, Panama officials stated they would not renew the Silk Road Deal with China. The Panama Canal essentially cuts a vessel’s commute by 27 days when operating properly. Following the meeting with Rubio, Panama promised free passage for US warships as well. limiting the presence of a global power also lessens the ability for the Chinese to potentially cripple the waterway at their will by sinking barges or a ship at each end (similar to the container ship accident that blocked the Suez Canal in March of 2021).  
Macroeconomics: The JOLTS job report came in with 400K less job openings than expected this morning. Most of the decrease was seen within the professional and business services(-225K), private education and health services (-194K), and financial activities (-166K). Layoffs were down slightly at 1.7 million, new hires were up to 5.46 million and voluntary quits were up at 3.2 million for the month. Unemployment rate is estimated to remain at 4.1% in this coming Friday report which would be unchanged from December (I wonder if the LA fire disasters or the government job purge will be reflected in that number). 
Ag Fundamentals: Corn export inspections were in line with expectations at 49.2M bushels, bean export inspections were on the top end of the estimate range at 37.1M bushels, and wheat was reported at an 8-week low at about 9.3M bushels. South American production estimates are still at the front of the minds of most within the ag  trading space. Mexico and Canada appear to have juked US tariffs for at least one more month while China appears to be taking on the Artist of the deal head on. China began an investigation into Google, establishing an anti-monopoly campaign against one of our largest tech companies. China in addition to tariffs of their own has also put export controls on metal exports. China’s economy is not standing on two strong legs at the moment which could be Trump’s largest advantage. It is also important to keep in mind that China tends to fight long term battles regardless if they must endure hardships in the short term. Xi and Trump conversation details should shed light on what we should expect the rest of February. Winter wheat conditions improved in Kansas from 47% in January to 50% good to excellent as of yesterday. Conditions grew worse in Oklahoma, Nebraska and Colorado. Nebraska’s topsoil went from short to very short in across 58% of the growing area in January to 78% today. This is the second mild winter in a row for much of the north states, and it is raising concerns for the health of the US waterways this spring. Drought compounds.     
Weather: The northern half of Buenos Aries and the southern half of Cordoba in Argentina are expecting strong to severe storms this evening. If these storms produce high winds, flooding and hail the narrative will be conflicted between recording damage to crops late in the season and increasing yields thanks to the drought relief. Rain fall is expected to range from 1-4 inches. Clearer skies are in the forecast of the areas of Brazil that have seen both bean harvest and 2nd corn planting delays recently. Estimates for Brazil’s corn crop have dropped from the USDA’s 127 MMT to closer to 123 MMT.   

The JOLTS (Job Openings an Labor Turnover Survey) reported job opening at 7.6M vs. the 8.0M openings expected. This makes the ratio of open jobs to workers 1.1 to 1.

JOLTS

CALENDAR SPREADS

Spread

Last

Chg

Full

% of FC

CH25/CK25

-10 1/4

 +3/4

-21 1/2

48%

SH25/SK25

-13   

+1 1/2

-27 1/2

47%

SK25/SN25

-12 3/4

+1 1/2

-27 3/4

46%

SH25/SN25

-25 3/4

+3   

-55 1/4

47%

MWH25/MWK25

-8 3/4

– 3/4

-20 3/4

42%

WH25/WK25

-11 3/4

0   

-16 1/4

72%

KWH25/KWK25

-9 1/4

 +1/4

-16 1/2

56%

 

COST OF CARRY

 

Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)

Futures Settlements & Technicals

Symbol

Close

Chg

High

Low

Support

Resist

20-Day

50-Day

CH25

494 1/2

+5 3/4

497 1/4

487 1/4

489   

501   

479 3/4

457 1/2

CK25

504 3/4

+5   

507 3/4

498 1/4

499   

512   

489 1/4

465 1/4

SH25

1075   

+16 3/4

1077 1/4

1048 1/4

1068   

1086   

1041 1/4

1011 1/2

SK25

1088   

+15 1/4

1089 3/4

1062 1/2

1080   

1092   

1054   

1023   

SN25

1100 3/4

+13 3/4

1102 1/2

1076 3/4

1090   

1112   

1065 3/4

1034 3/4

MWH25

621 3/4

+5 1/4

622   

604 3/4

616   

626   

598 1/4

596 1/4

MWK25

630 1/2

+6   

631   

613 3/4

625   

634   

607 1/4

604 1/2

WH25

577   

+10 1/4

579   

558   

572   

582   

548 3/4

549   

WK25

588 3/4

+10 1/4

590 1/4

570 1/2

580   

595   

561 1/2

560   

KWH25

594 3/4

+9   

597   

576   

586   

602   

565 1/4

557 3/4

KWK25

604   

+9   

606   

585 3/4

598   

611   

574 3/4

566 1/4

SMH25

314

+10.30

314.9

304

310.00

317.90

304.70

301.80

BOH25

45.76

-0.75

46.22

44.64

45.25

47.10

44.95

42.90

>>Interested in more commentary by Joe Mauck?  Go HERE

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