Ag Market View for Jan 13.25

CORN

Prices were $.06-$.08 higher today with spot Mch-25 trading to a fresh 7 month high.  Key resistance is at the 100 week MA at $4.80.  Despite the strength spreads weakened with Mch/May trading out to $.10 ¼ for the first time since Sept-24.  The Ag. space continues to draw support from Friday’s constructive USDA data.  Export inspections at 57 mil. bu. were above expectations and MY high.  They were also above the 51 mil. bu. needed to reach the revised USDA forecast of 2.450 bil. bu.  YTD inspections at 697 mil. are up 27% from YA vs. the USDA forecast of up 7%.  Japan took 18 mil. bu. while Mexico took 16 mil.  AgRural reports Brazil’s 1st corn harvest at just over 1% complete.  US stocks at 1.540 bil. bu., while not historically tight, they are well below the 2.0 bil. forecast last October and provide much less cushion for below trend crops in SA.  Global stocks (less China) at 87 mmt are the tightest since 2012.  Global stocks among major exporting countries drop 5 mmt from Dec to Jan lowering the stocks/use ration to 7.6%, the 2nd lowest in the past decade.

SOYBEANS

Prices were higher across the board with beans up $.26-$.28, meal was $9-$10 higher while oil was up 40-50 points.  Oil spreads weakened, meal spread firmed while bean spreads were mixed.  Today’s rally in Mch-25 beans stopped just shy of the Nov-24 high at $10.55.  Resistance for Mch-25 meal is at its 100 day MA at $310.80.  Mch-25 oil jumped out to a fresh 2 month high settling just below $.46 per lb.  Spot board crush margins backed up $.02 ½ to $1.30 bu. with bean oil PV falling back just below 43%.  Much of Central Argentina and Southern Brazil will remain in a hot/dry pattern this week before scattered showers start providing some relief by Friday thru the weekend.  Follow up showers are expected next week as temperatures ease to more seasonally average levels.  Coverage of next week’s rains however are not likely to be uniform.  The USDA announced the sale of 198k mt (7.2 mil. bu.) of soybeans to China. Soybean inspections at 50 mil. bu. were in line with expectations.  YTD inspections to 1.151 bil. are up 22% from YA vs. USDA forecast of up 8%.  China took 20 mil. with 8 mil. going to Bangladesh.  Chinese customs data showed their Dec-24 soybean imports at 7.94 mmt were down slightly from Dec-23.  Total imports in 2024 reached 105 mmt, up 6.5% from 2023, likely as China stockpiled beans ahead of potentially higher tariffs under the incoming Trump Administration.  The USDA kept their Chinese import forecast for 2024/25 unchanged at 109 mmt.  AgRural is reporting Brazilian soybean harvest at less than 1% vs. 2.3% YA and the slowest in 7 years.  While US soybean inventories at 380 mil. bu. aren’t historically tight, they were below the range of estimates and a far cry from the 550 mil. forecast last fall.  Global stocks are still expected to jump to a record high at 128 mmt, however also well below forecasts from last fall at 135 mmt.  Stocks/use among global exporter fell to just below 21%, still the highest in 6 years, however well below estimates from last fall.  IMO we’ll need to see combined production in Argentina/Brazil fall below 220 mmt, from the current 221 mmt for spot bean prices to extend (and hold) gains above the Nov-24 high of $10.55.

WHEAT

Prices were $.09-$.14 higher across all 3 classes today with Chicago futures leading the path higher.  Key resistance for Mch-24 Chicago rests at its 50 day MA at $5.56.  KC Mch-25 closed above its 50 day MA for the first time in 3 months.  Little to no moisture is expected across the WCB and plain states over the next week while much of the continental US holds in a cooler than normal pattern the next 2 weeks.  Export inspections at 11 mil. bu. were in line with expectations however below the 16 mil. needed per week to reach the USDA forecast of 850 mil. bu.  YTD inspections at 478 mil. are up 25% from YA, vs. the USDA of up 20%.  IKAR is reporting that Russia’s export price for wheat ended LW at $237/mt FOB, unchanged from the previous week.  SovEcon is reporting Russian grain exports LW only reached 410k mt, of which 400k mt was wheat.  This was well below the previous week’s grain shipments of 550k mt.  Russia lowered their export tax on wheat 2.3% to 4,245 roubles/mt for the period ending Jan. 21st.  Although global wheat stocks among major exporters rose a touch in Jan-25, at just below 14% remains the lowest in over a decade.  

Charts provided by QST.

 

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