Written Commentary
Ag Market View for Dec 13.24
December 13, 2024
CORN
Outside of Dec-24 being down $.04, prices closed steady. Dec-24 likely seeing long liquidation ahead of Friday’s 1st notice day. Inside day for Mch-25 corn as it held very near its 100 day MA at $4.27. Global weather remains non-threatening. The US $$$ index plunged to a 2 week low pressured by falling US Treasury yields. Ethanol production was a record high at 1,119 tbd, or 329 mil. gallons, up from 326 mil. the previous week and up 10.7% from YA. Corn usage at 112.5 mil. bu., or 16.1 mil. bu. per day, was well above the 14.8 mbd needed to reach the USDA forecast of 5.450 bil. In the MY to date there has been 1.269 bil. bu. used, or 15.3 mbd, an annualized pace of 5.580 bil. If LW’s pace held over the last 40 weeks of the MY, corn usage would reach 5.80 bil. bu. Ethanol stocks rose to an 8 week high at 22.9 mil. barrels, above the 21.4 mb from YA. The current USDA corn usage forecast is too low. Implied gas demand rose 1% to 8.506 mbd, and was up 3.7% YOY. US corn acres in drought fell another 7% to 52%, down from 81% only 4 weeks ago.
SOYBEANS
The soybean complex was mixed with beans $.02-$.05 higher, meal up $2-$4, while oil plunged 160-185 points. Bean spreads have firmed while spreads for both products weakened. New lows for meal spreads ahead of Friday’s FND. Jan-25 beans continue to chop around between $9.75-$10. Jan-25 meal stopped just shy of this week’s high at $299.50. Jan-25 oil rejected trade above its 100 day MA, however held support above this week’s low at 40.64. Spot board crush margins were crushed, down $.20 bu. to $.98 ½ , a 6 month low. Export demand for US oil should remain robust with prices near a record large discount to palm oil. Much of Argentina and Brazil are forecast to see a good mix of rain and sunshine thru the first full week of December keeping production prospects high. This morning the USDA announced the sale of 132k mt (4.8 mil. bu.) of soybeans to China. US soybean acres in drought fell another 6% to 47%, down from its recent peak of 73% only 4 weeks ago.
WHEAT
Prices were generally $.10-$.15 lower across all 3 classes today. Dec-24 KC was $.24 while Chicago was down only $.02 ahead of FND. Mch-25 contracts for all 3 classes hovered very near the lows for the month and just above their contract lows from August. Reduced tensions in the Black Sea region, improved conditions in the US along with lower basis levels in Argentina all weighed on wheat prices. Precipitation will be limited across the nation’s midsection over the next week to 10 days as a much colder pattern settles in over the central and eastern thirds of the continental US. Algeria reportedly bought between 140-150k mt of milling wheat from the Black Sea region for around $267/mt CF. In addition Tunisia purchased 100k mt each of soft wheat and durum wheat. The average price for the soft wheat was just below $259/mt CF and just over $348/mt CF for the durum. US winter wheat acres in drought plunged another 12% to 28%, well off the 62% peak from 4 weeks ago. Spring wheat area in drought also dropped 8% to 34%.
All 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.
