Ag Market View for Dec 18.24

CORN

Prices dropped $.05-$.06 today while spreads were little changed.  Mch-25 carved out a new low for the week with next support at the 50 day MA, currently $4.34.  The USDA announced the sale of  135k mt (5.3 mil. bu.) of corn to Colombia.  Ethanol production rebounded to 1,103 tbd, or 324 mil. gallons, up from 317 mil. the previous week and up 2.3% from YA.  Production was above expectations and above the pace needed to reach the USDA corn usage est. of 5.50 bil. bu.  There was 111 mil. bu. used, or 15.9 mil. bu. per day, well above the 15.0 mbd needed to reach the USDA.  In the MY to date there has been 1.589 bil. bu. used, or 15.28 mbd, an annualized pace of 5.578 bil.  Chinese customs data showed corn imports in Nov-24 at only 300k tons, down 92% from Nov-23.  Ethanol stocks were stable at 22.64 mil. barrels, below the 22.9 mb from YA, and below expectations.  Production rates have remained elevated despite a pullback in margins.  Implied gasoline usage rose 1.3% LW to 8.927 mbd and was up 2% YOY.  Chinese customs data showed corn imports in Nov-24 at only 300k tons, down 92% from Nov-23.  In the first 11 months of the year their imports have reached only 13.3 mil. tons, down 40% YOY.  Export sales tomorrow are expected to range from 30-60 mil. bu.

SOYBEANS

Prices were sharply lower across the complex with soybeans and meal falling to new contract lows while oil collapsed to a 3 month low.  A late day surge in the US $$ enabled prices to extend to new lows across the agricultural space.  As expected the Federal Reserve cut the Fed Funds target range 25 bp’s to 4.25%-4.50%, however signaled fewer rate cuts in 2025 than previously expected.  The medium forecast for rates at the end of 2025 now stands at 3.9% up from 3.4% in Sept.  This implies two 25 bp cuts in 2025, down from 4.  Beans were down $.24-$.26, meal was $6-$8 lower, while oil was down a full penny.  Bean spreads are slightly firmer while product spreads were weaker.  Nearby oil spreads widened to new lows.  Spot soybeans appear to be on a fast track to challenge the Aug-24 lows near $9.35 which has been our longer term downside target.  Spot meal has reached our longer term downside target of $280.  Next long term support is at $256.  Next support for Mch-25 oil is at the Sept-24 low near $.39 lbs.  Spot board crush margins slipped another $.04 to $.98 per bu., below the $1.00 level for the first time since June-24.  The USDA announced the sale of 120k mt of soybean meal to Colombia.  Weaker basis levels in Brazil continue to impact soybean valuations as supply pressure builds.  The USDA is forecasting global bean production to exceed demand for the 3rd consecutive year.  Stocks are forecast to reach an all-time high with stocks/use reaching 32.7%, 2nd only to 2018/19 trade war years with China.  Export sales tomorrow are expected to range from 30-75 mil. bu. for beans, 150-350k tons of meal and 10-50k tons of oil.         

WHEAT

Prices failed to hold early strength pulled back to close $.02-$.04 lower pressured by weakness all around.  Mch25 Chicago set a new contract low at $5.40 by a ¼ cent.  Chicago Mch-25 premium to Mch-25 corn slipped to a new low at $1.00 per bu. overnight before recovering.  Outside day down for both Mch-25 KC and MGEX contracts.  Tunisia is tendering for 100k mt of both milling grade wheat and durum for Jan/Feb shipment.  Offers for this tender are due tomorrow.  A South Korean flour mill is seeking around 90k mt of Canadian or US milling wheat for March thru April shipment.  Also its being reported at midday Algeria has purchased an undisclosed amount of durum for March/April shipment between $340-$352/mt CF, depending on vessel size.  Much of the grain is expected to have been sourced from Canada, however US and Australian wheat may also have been purchased.  Export sales are expected to range from 8-20 mil. bu.

All charts provided by QST.

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