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Just What the Doctor Ordered. Ag Marketing Report 01/13/2025
The second Friday in January is often known as quitters day, the day that most New Years resolutions end. While the resolutions are not a direct doctor order, some can improve your health, such as eating right or working out etc. However, for the grain markets this week the doctors had prescribed a USDA report that turned out to be quite helpful. With drastic cuts to yield and tightening stocks grain bulls seemed to perk up this week, at least on the corn and bean side.
Corn put on a rally this week, mainly on the Friday move, with March up 19 ¾ cents and hitting the highest price on the spot month chart since last May. The culprit was a USDA report that saw yield down 3.8 to 179.3 bpa Production was dropped by 276 mbu to 14.867 bbu. Ending stocks were down 198 mbu to 1.54 bbu, as December 1 stocks came in 97 mbu from last year at 12.074 bbu. EIA data showed ethanol production backing off by 9,000 barrels per day to 1.102 million bpd in the week of 1/3. Stocks of ethanol continued to build, this time by another 509,000 barrels to 24.148 million barrels. Export Sales data saw 2024/25 corn bookings at a marketing year low of 444,950 MT for the week ending on January 2. That took export commitments to 39.246 MMT, which is 63% of the new US export forecast and still ahead of the average sales pace of 59%. November corn exports were tallied at 4.7 MMT (185.2 mbu), up 16.2% from October. Ethanol exports were a monthly record at 187.6 million gallons.
Wheat posted some gains in all three markets this week, with some bigger than others. Chicago March was back up 1 1/2 cents (0.28%) on the week. March Kansas City posted a gaon of 12 3/4 cents (2.37%) this week. MPLS March was 6 1/2 cents (1.13%) higher than last Friday. There were some individual state Crop Progress reports released this week, shing KS winter wheat ratings down 6% from the middle of December at 47% gd/ex. Ratings in OK slipped 3% since the last report at the end of November to 45% gd/ex. December 1 wheat stocks were tallied at 1.569 bbu, up 148 mbu from 2023. The WASDE showed very few changes to the US wheat balance sheet, up 3 mbu on increased imports and seed use to 798 mbu. Winter Wheat Seedings data showed all winter wheat acreage at 34.115 million acres, up 725,000 acres from last year. The weekly Export Sales report showed US wheat export business backing off to another marketing year low at 111,309 MT during the week of January 2. That took export sale commitments to 17.192 MMT, which is now 74% of the USDA forecast for exports and still lagging the 82% average selling pace. Wheat exports in November totaled 1.42 MMT (52 mbu), which was still a 4-year high for November.
Soybeans found some footing this week, with March up 33 ½ cents. Bean oil rallied up 565 points (14.15%), as meal was down $10.30/ton on the week (-3.34 %). Crop Production data showed a 1 bpa cut to yield at 50.7 bpa, as production was down 95 mbu to 4.366 bbu. That helped to tighten the US ending stocks projection by 90 mbu to 380 mbu. December 1 soybean stocks were tallied at 3.099 billion bushels, which was 98 million bushels from last years total. This week’s Export Sales report tallied 2024/25 soybean bookings at 288,671 MT, a marketing year low. That took the accumulated shipped and unshipped sales to 40.391 MMT. That is 81% of USDA’s expected export total for the marketing year, above the 80% average pace. Soybean exports during November totaled 9.88 MMT (392.88 mbu), the highest Nov total in 3 years. Meal exports continue to be record, at 1.55 MMT in November, with bean oil the largest in over 2 years for any month at 58,510 MT.
Live cattle continued their strength, with February up $4.725 (2.43%) as the cash market was rallying. Cash trade was reported at $200-201in the South and live sales of $202-205 in the North. Feeders were up $7.525 (2.84%) on the week in the January contract. The CME Feeder Cattle Index was up a sharp $12.79 week/week to $278.55. Wholesale boxed beef prices were higher again this week, as the Chc/Sel spread narrowed to $18.70/cwt. Choice was up $7.60 (2.3%) to $332.84, while Select shot $17.42 higher (5.9%) to $314.14. Weekly beef production was up 16.6% from last week and 12.5% above the same week last year at 512.1 million lbs. Beef export sales totaled 5,599 MT in the week of January 2 to kick off the new year. Shipments totaled 10,980 MT in that week. Census data showed November beef exports at 253.1 million lbs, which was a 5% jump over last month and 10.4% larger than last year.
Hogs were back up $1.77 this week, a 2.2% gain. The CME Lean Hog Index was back down $3.40 this week at $80.59 as of January 8. USDA’s Pork Carcass Cutout was back up $1.82 this week. The ham and belly were the only primals reported higher, up $2.31 and $18.47 respectively. Pork production totaled 553.1 million lbs this week, back up 12.7% from last week and 17.1% larger than the same week last year. Pork export sales totaled 31,038 MT in the week of January 2. Shipments totaled 25,474 MT in that week. Pork exports during November totaled a monthly record 643.5 million lbs, according to Census data, which was up 5.9% from last year and 10.4% larger than October’s total.
Cotton fell back lower this week, down 65 points since last Friday. USDA raised their cotton production total by 150,000 bales to 14.41 million. With a 300,000 bale cut to exports, USDA raised their carryout projection by 400,000 bales to 4.8 million. Cotton Ginnings data showed 1.626 million RB of cotton had been ginned in the last couple weeks of December. That brought the season’s total to 13.051 million RB, the largest in 3 years and up 18% from last year. The weekly Export Sales report tallied cotton sales back up this week to 137,382 RB of cotton sold in the week of January 2. Shipments were a MY higher at 191,682 RB. Commitments are now at 7.752 million RB, which is 75% of the new USDA forecast, compared to the normal sales pace of 79% of USDA’s export projection by now. November cotton exports (excluding linters) totaled 658,655 bales, which was up 14.92% from October and 18.07% above last year. The FSA Adjusted World Price for cotton was back down 37 points this week, to 54.66 cents/lb.
Market Watch
We start off next week with the weekly Export Inspections report on Monday morning per normal. On Tuesday morning, PPC data will be released, with CPI data out on Wednesday. Tuesday is also the last trade day for January soybean, meal, and oil futures. EIA’s weekly Petroleum Status Report will out on Wednesday morning, with NOPA data also out that morning. The weekly Export Sales report will be back to a Thursday morning release at least for one week.
Tech Talk: March Soybeans
Price action as of tonight looks a little better than it did a month ago. After breaking out of a Bollinger pinch to the downside, initially and spiking to $9.47, the market rallied has 80 cents. The Bollinger midline held nicely this week at $9.90 after a stochastics sell signal. Friday’s action blew through the downtrend line off the May and September highs, with the 100-day moving average at $10.19 also being exceeded at the close. We’ll find out Monday it that is all a 90 mbu stocks cut is worth. The ½ speedline is at $10.25 ¾, which the close did hold. Breaking that opens the door to the 38.2% retracement resistance at $10.57.
There is a risk of loss in futures and options trading. Similar risks exist for cash commodity producers. Past performance is not necessarily indicative of future results.
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