Ag Market View for Feb 3.25

CORN

Prices were $.05-$.07 higher today with spreads steady to slightly firmer.  Mch-25 managed to close both gaps from the lower open the past 2 trading sessions.  Recovery from overnight weakness was triggered by tariffs on Mexican imports pushed back a month as their Pres. offered to send 10,000 national guard troops to the US border.  Mexico is the largest importer of US corn with 24/25 commitments reaching a late January record at 637 mil. bu.  51% of these sales have already been shipped, in line with the historical average.  There are another 254 mil. bu. committed to an unknown buyer, about double from YA and the highest in 4 years.  Money managers were net buyers of just over 39k contracts of corn extending their long position to 350,721 contracts, their largest position since May-22.  The index funds long position in corn has swelled to just over 470k contracts, also the largest since May-22.  Export inspections at 49 mil. bu. were in line with expectations.  YTD inspections at 856 mil. are up 33% from YA vs. the USDA forecast of up 7%.  Largest takers were Mexico 13 – mil. while Korea and Japan took 8 mil. each.  AgRural reports Brazil’s 1st corn crop is 14% harvested while their 2nd crop is 9% planted.  Corn used for the production of ethanol in Dec-24 reached 473 mil. bu., while up 1.8% from Nov-24, it was down 2.3% YOY and at the low end of expectations.  Cumulative usage over the first 4 months of the 24/25 MY at 1.853 bil. bu. is up 1% from YA, consistent with the current USDA forecast.  For now expect no change to the current USDA est. of 5.50 bil. bu. in next week’s WASDE report. 

SOYBEANS

Prices were higher across the complex with beans up $.12-$.16, meal was $2-$3 higher, while oil was up 40-60.  Spreads firmed in beans and meal, while weakening in the oil.  Outside day up in Mch-25 soybeans with next resistance at LW’s high at 10.61 ¾.  Mch-25 oil surged to a 2 ½ month high however closed back below $.47 lb.  The US has used just over 4.5 mmt of canola in the production of biofuels in the past 12 months with nearly half of that volume coming from Canada.  Mch-25 meal recovered to close back above its 50 day MA.  Next resistance is the 100 day MA at $308.80.  Spot board crush margins fell $.06 to $1.21 ½ while bean oil PV held steady at 43.4%.  Much of central and northern growing regions of Brazil remain in a wetter than normal pattern keeping soybean harvest and planting of the 2nd corn crop at a slower than normal pace.  Crop stress will be on the rise in RGDS with much above normal temperatures this week.  Showers across Argentina will be spotty over the next week to 10 days as temperatures warm to above normal readings.  Last week MM’s were net buyers across the soybean complex buying 16.2k soybeans, 15.5k bean oil and nearly 9k soybean meal.  MM’s remain net long beans and oil while still holding a short position of 52k in meal.  Soybean inspections at 37 mil. bu. were in line with expectations and well above the 15 mil. needed per week to reach the USDA forecast of 1.825 bil. bu.  YTD inspections to 1.252 bil. are up 16% from YA vs. USDA forecast of up 8%.  China took 13 mil.  AgRural reports Brazil’s soybean harvest has reached 9%, vs. 16% YA and 5-year Ave. of 12%.  Census crush in Dec-24 at 218 mil. bu. was in line with expectations and also a record high for any month, above the previous record of 216 mil. bu. in Oct-24.  Cumulative crush over the 1st 4 months of the 24/25 MY have reached 830 mil. bu., up 6.3% from YA vs. the USDA forecast of up 5.4%.  Soybean oil production was also a record high at 2.573 bil. lbs.  Month end stocks rose 4.8% to 1.696 bil. lbs., however were slightly below the Ave. est. of 1.734 bil.

WHEAT

Prices closed $.01-$.07 higher as both Chicago and KC gained against MGEX futures.  Chicago Mch-25 traded to a 2 ½ month high however stalled just above its 100 day MA at $5.72 ½.  Mch-25 KC challenged LW’s high at $5.90 ¾.  Mch-25 MGEX traded to a 2 ½ month high before backing up.  IKAR is reporting Russian wheat for export closed LW at $239/mt up $2.50 from the previous week.  SovEcon est. Russian grain exports at 660k mt last week, unchanged from the previous week, however wheat sales improved to 590k mt, up from 530k the previous week.  Export inspections at 9 mil. bu. were at the low end of expectations and below the 16 mil. needed per week to reach the USDA forecast.  YTD inspections at 515 mil. are up 24% from YA, vs. the USDA of up 20%.  Last week MM’s sold nearly 19k contracts of Chicago wheat extending their short position to 111k, the largest in 13 months.  They also sold 7,255 contracts of KC wheat extending their short position to 42.4K contracts.  The combined short position across all 3 classes has swelled to just over 176k contracts, the largest since Dec-23. 

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