Ag Market View for Jan 22.25

CORN

Prices closed steady to $.06 lower with weakness in the old crop contracts.  Mch-25 pushed to a fresh 8 month high before backing up in volatile trade.  Mch-25 did hold support at yesterday’s low of $4.82 ½.  Spreads eased a  bit.  President Trump reiterated his threat to impose an additional 10% tariff on Chinese imports starting Feb. 1st partly for its failure to end fentanyl trade with Mexico/Canada.  Threats of a 25% tariff on imports from Mexico and Canada for their inability to control immigration and fentanyl crossing our respective borders still stands.  The USDA announced the sale of 136k mt (5.4 mil. bu.) to an unknown buyer.  A South Korean feed group reportedly bought 136k mt of optional origin feed corn between $251-$252/mt CF for April/May shipment.  Algeria is seeking 240k mt of feed corn, the deadline for the tender is tomorrow.  S&P Global has raised their US 2025 corn acreage forecast roughly 700k acres to 93.5 mil.  If realized this would be up nearly 3 mil. from 2024 and an 8 year high.  The weekly EIA report that outlines ethanol production was delayed until tomorrow due to Monday’s MLK Holiday.

SOYBEANS

Prices were sharply mixed across the complex with beans down $.03-$.11 led lower by old crop, meal was $4-$5 higher while oil was down 135 points.  Bean spreads weakened while product spreads were little changed.  China has temporarily halted soybean cargoes imported from Brazil as custom agents in China have detected the presence of pests and pesticides in these cargoes.  Brazil’s Ag. Ministry has vowed to intensify efforts to correct the issue and expect export volumes will not be affected.  Mch-25 beans carved out a new 3 ½ month high in choppy 2 sided trade before pulling back.  With US FOB prices more than $1.00 higher than Brazil, upside price appreciation would appear limited, unless led by Brazil.  Meal prices likely drew support from short covering as speculative traders continue to hold a rather sizable short position.  Next resistance for Mch-25 is the Jan-25 high at $321.60.  Mch-25 oil violated support at $.45, falling to about the midpoint of the high from last November to last month’s low.  Spot board crush margins rebounded $.07 today to $1.27 ½ per bu. with soybean meal PV jumping to 58.7%, a 3 week high.  Rain in Argentina over the next week to 10 days look to favor the west-central and northern growing regions.  Precipitation in the east-central and southeast will be more erratic with net drying expected.  Central and northern growing areas of Brazil are likely to see a brief drying trend the last week of January, however week 2 of the outlook suggests a return of above normal precipitation keeping soybean harvest and 2nd crop corn plantings at a slower than normal pace.  S&P Global has lowered 2025 soybean acreage forecast roughly 700k to 83.3 mil. acres.  If realized this would be down 3.7 mil. from 2024 and a 6 year low.  Algeria is also seeking 70k mt of optional origin bean meal with tomorrow being the tender deadline.

WHEAT

Prices finished mixed ranging from down $.03-$.05 in Chicago to up $.02 in MGEX.  Chicago Mch-25 stalled just below the Dec-24 high at $5.69 ¼.  Mch-25 KC rejected trade above its 100 day MA after jumping out to a 2 ½ month high.  MGEX Mch-25 traded ¼ cent above its Dec-24 high also before backing off.  US precipitation over the next week is expected to favor the Gulf coast and Delta region with little to no moisture across the nation’s midsection.  Temperatures are expected to trend back to normal or above normal thru the end of Jan-25. S&P Global raised their all wheat acreage forecast for 2025 1.1 mil. acres to 47.1 mil, with winter wheat acres at 34.115 mil., in line with the USDA Jan-25 forecast.  Recently SovEcon held their Russia production est. unchanged at 78.7 mmt however felt that if a significant cold snap occurred, production would be at considerable risk to winterkill given the poor shape the crop was in as it entered dormancy.  The number of contracts held by money managers in corn, less the contracts held short across all 3 classes of wheat has grown to a record large level.

Charts provided by QST.

 

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