Written Commentary
CORN
It was a gut check day for corn bulls as nearby futures closed into new lows for the week. Overall prices were $.05-$.08 lower. Nearby spreads actually firmed while back months weakened. The higher US $$, lower energy prices along with forecasts for widespread rains in Argentina over the next 2 weeks weighed on commodity valuations. Exports at 57 mil. bu. were in line with expectations. YTD commitments at 1.885 bil. are up 29% from YA, vs. the USDA forecast of up 7%. Current commitments represent 77% of the USDA forecast, above the historical average of 69%. Noted buyers were Mexico – 22 mil., and Japan – 18 mil. Still no slowdown in sales to Mexico with tariffs on hold for now. The BAGE reports corn ratings improved 3% to 19% G/E, while poor/VP fell 3% to 30%. Production was left unchanged at 49 mmt. CoBank is forecasting 2025 US corn acres will increase 3.9 mil. over YA to 94.5 mil. and pretty much in line with acres in 2023. The USDA annual Outlook Forum late next week will release an early look at the US acreage mix along with long-term supply and demand forecasts. The Outlook Forum has overestimated US corn stocks the last 5 years, and 8 of the past 11. COF as of Feb. 1st at 99% of YA was in line with expectations. Placements at 102% were also in line, while marketings at 101% were slightly below the Ave. trade guess at 102%.
SOYBEANS
Prices were lower across the complex as beans were down $.02-$.06 with old crop the downside leader, meal was steady to $1 lower while bean oil was down 30-45 points. Spreads were weaker across the entire complex. Spot Mch-25 was able to trade into a new high for the week overnight, however stopped shy of resistance at $10.50. MA support rests just above $10.20. Inside trading session for both products. Mch-25 meal remains stuck between $290-$300 per ton while oil consolidates just under $.47 lb. Rains are expected across the southern Argentina this weekend before gradually shifting north by late next week and the following weekend. Until then much of the central and northern growing areas experience dry and very hot conditions with crop stress on the rise. Rains last week led to slightly higher corn and soybean ratings as reported by the Buenos Aires Grain Exchange. Bean exports at 18 mil. bu., were at the high end of expectations. YTD commitments at 1.607 bil. are up 13% from YA vs. the USDA forecast of up 8%. Commitments represent 88% of the USDA forecast, above the historical average of 86%. Soybean meal sales at 317k tons were in line with expectations with commitments are up 16% vs. USDA up 8%. Soybean oil sales at 19k mt (43 mil. lbs.) were above expectations. YTD commitments at 1.523 bil. lbs. represent 95% of the USDA forecast of 1.60 bil. EPA data from yesterday showed D4 biodiesel credits generated in Jan-25 at only 486 mil. were down sharply from the 907 in Dec-24, suggesting a sharp slowdown in biodiesel and RD production in the New Year after the expiration of the $1 per gallon blenders credit. The census EPA production and feedstock usage data from Dec-24 will be released next Friday. CoBank is forecasting 2025 US bean acres will only reach 84 mil. down 3.1 from YA. The Feb. Outlook Forum has overestimated US soybean stocks 7 of the past 11 years.
WHEAT
Prices were mixed from down $.01 in MGEX, up $.02 in KC while Chicago was the upside leader up $.03-$.04. KC and CGO held withing yesterday’s range while MGEX dipped to new lows near the close. Extreme cold across the US midsection will gradually give way to above normal temperatures by late this weekend and into early next week, particularly for the Western half of the continental US. Exports at 23 mil. bu. (19.3 mil. – 2024/25 MY, 3.6 mil. – 25/26) were above expectations. Old crop commitments at 726 mil. bu. up 11% from YA, vs. the USDA forecast of up 20%. Commitments represent 85% of the USDA forecast vs. the historical average of 86%. By class commitments to date vs. the USDA forecast are HRW up 47% vs. USDA up 57%, SRW down 36% vs. down 21%, HRS up 6% vs. up 15% and white up 47% vs. up 45%. CoBank is forecasting 2025 US spring wheat acres will drop 6% to 10 mil. acres. Russia’s Ag. Ministry slashed their wheat export tax 24.6% to 2,742.60 rouble/mt for the period ending Mch. 4th. The Outlook Forum in February has underestimated US wheat supplies 9 of the past 11 years.
Charts provided by QST.
>>See more market commentary here.
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.
