Written Commentary
Ag Market View for Dec 13.24
December 13, 2024
CORN
Prices were $.03-$.04 lower today largely in sympathy with lower wheat prices. Spreads continue to firm as demand remains strong. The Dec-24/Mch-25 spread traded into $.10 ½ , the highest since June-24. I look for further easing of drought readings in the Midwest and southern plains in tomorrow’s updated drought monitor. The USDA also announced the sale of 401.4 mmt (16 mil. bu.) of corn to Mexico and 291k mt (11.5 mil. bu.) to an unknown buyers. Harvest advanced 4% to 95% complete vs. 86% from YA and the 5-year Ave. of 84%. Still the most advanced harvest pace since 2012. Weekly ethanol production is delayed until tomorrow and is expected to range from 1,065 – 1,105 tbd vs. 1,105 tbd the previous week, which was also a MY high. No word yet on Algeria’s 240k mt tender for SA feed corn. Conab to release updated Brazilian production estimates tomorrow AM. Wire services report an average trade est. for corn production at 123.5 mmt, up from 119.7 last month, still below the USDA forecast of 127 mmt.
SOYBEANS
The soybean complex was lower across the board today with beans down $.03-$.04, meal was roughly $1 lower while bean oil was down about a full $.01 per lbs. Friday’s bullish USDA report is a distant memory. Nearby bean spreads firmed, while deferred spreads weakened. Both product spreads weakened with new lows being reached in the meal. Jan-25 beans once again held support above $10.00. Upside resistance is at the 50 day MA at $10.24 ¼. New contract low for Dec-24 meal with next support near $280, the low from 2020. Next support for Dec-24 oil is at LW’s low of 44.34. Palm oil was down almost 1% overnight following the 3.2% drop the previous session. This despite the Indonesian Govt. reaffirming they would implement a 40% mandatory biodiesel mix with palm oil, known as B40 starting Jan-25. There was some speculation they may push this initiative back into the New Year. This is up from the current 35% blend right now. The Trump Administrations nominee to head up the EPA, Lee Zeldin, is also being viewed unfavorably by the bean oil market as he has historically been a critic of regulation and biofuel mandates. Also pressuring the soybean complex were comments from an executive at COFCO suggesting China may only import 98.8 mmt of soybeans in the 24/25 MY, well below the USDA forecast of 109 mmt. The source suggested that by stockpiling soybeans in the 2nd half of 2024 ahead of the US election, import demand the balance of the MY would be lighter than normal. The source went on the suggest imports form the US would likely range from 20-25 mmt, depending on how US/Chinese relations evolve. Overall weather forecasts in South America are supportive for crop development, however a few dry pockets may develop in Southern Brazil and WC growing regions of Argentina. US harvest advanced 2% to 96% complete, vs. 86% YA and 5-year Ave. of 84%. Spot board crush margins slid another $.11 ½ today to $1.31, a fresh 2 month low, while bean oil PV dropped to 43.7%, well off its recent peak over 45%.
WHEAT
Prices are $.06-$.11 lower across all 3 classes today with all classes trading to fresh 3 month lows. While US wheat areas in drought are expected to keep falling, no significant drought relief is expected for Western Russia, Ukraine and western Kazakhstan over the next week to 10 days. US winter wheat plantings advanced 4% to 91% complete vs. 92% YA and the 5-year Ave. of 93%. Emergence has reached 76% vs. YA and the 5-year Ave. of 79%. 44% of the crop is rated G/E, up 3% from last week and in line with expectations. 18% of the crop is poor or very poor, vs. 23% LW and 17% YA. Russia continues to offer 12.5% wheat at $226/mt FOB for Dec-24 and $230/mt for Jan-25, well below the suggested floor price from their Ag. Ministry of $250/mt. Despite the recent price weakness spreads remain well off their October lows. Chicago Dec-24 premium over Dec-24 corn fell to $1.14 ½ a fresh 8 month low.
All charts provided by QST.
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