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BQC Afternoon Comments Jan 29.2025

January 29, 2025
Joe Mauck
@TradewithAFS

CLOSING COMMENTS

Macroeconomics:

Jerome Powell and the Federal Reserve decided to keep federal interest rates unchanged. Powell in his comments following the report said, “we don’t need to be in a hurry to adjust policy stance”, “he committee’s 2% inflation goal will be retained and will not be focus of the review”, and “I’ve had no contact with the President”. Following his comments the Fed probability website slightly decreased the likelihood of 2 more rate cuts this year, with 1 cut starting to look more plausible.

Ag Fundamentals:

Ethanol production slowed by nearly 600K barrels week-over-week to hit production levels just above the 5-year average for this time of year. Ethanol margins tightening and stocks increasing rapidly over the last few weeks have caused production to slow. We also had a national holiday last Monday and plants tend to run slower due to colder weather. Export sales estimates will be released tomorrow morning and estimates are seen in the section below

Export Sales Estimates (for week ending 1/24/25)

	Sales 24/25	Est Range	Sales 25/26	Est Range
Wheat	_______	150K-500K	_______	0-50K
Corn	_______	850K-1,800K	_______	0
Beans	_______	450K-1,700K	_______	0
Meal	_______	100K-400K	_______	0
Soyoil	_______	4K-20K	_______	0

EIA Weekly Ethanol Production

For Week Ending 1/24/2025

Ethanol Production dropped 588K barrels week-over-week to 1.015 million barrels of ethanol per day last week. High stock inventories and low margin incentive is the main reason for the drop in production.

EIA Weekly Ethanol Stocks

Ethanol Stocks dropped slightly as production decreases have given the stock surge some headwind. Only 93K barrels off the record high for this time of year.

Implied Corn Usage

Corn Usage dropped below the 5-year average at 102.05 million bushels used for ethanol last week.

*Corn usage estimate subtracts sorghum used for ethanol based on USDA monthly grain crush report. Bushel to gallon conversion is based on implied yield: EIA monthly ethanol production divided by net (corn and sorghum) bushels crushed from USDA month report.

CALENDAR SPREADS

Spread	Last	Chg	Full	% of FC
CH25/CK25	-10 1/2	+1/4	-21 1/2	49%
SH25/SK25	-14 3/4	– 1/4	-27 1/2	54%
SK25/SN25	-13 1/2	– 3/4	-27 1/2	49%
SH25/SN25	-28 1/4	-1	-54 3/4	52%
MWH25/MWK25	-8 1/2	+1 3/4	-20 3/4	41%
WH25/WK25	-13 1/2	0	-16 1/4	83%
KWH25/KWK25	-10	– 1/4	-16 1/4	62%

COST OF CARRY

Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)

Futures Settlements & Technicals

Symbol	Close	Chg	High	Low	*Support*	*Resist*	20-Day	50-Day
CH25	497	+11 3/4	497 1/2	485	489	500	473 1/4	453 1/2
CK25	507 1/2	+11 1/2	508	495 1/2	499	511	482 1/4	461
SH25	1060 1/2	+15 1/2	1061 3/4	1044 1/2	1051	1072	1030 3/4	1007 3/4
SK25	1075 1/4	+15 3/4	1076 3/4	1059 1/2	1062	1085	1043	1019 1/4
SN25	1088 3/4	+16 1/2	1090 1/2	1072	1078	1094	1054 1/4	1030 3/4
MWH25	613 3/4	+16	614 1/4	596 1/2	605	620	592 1/4	595
MWK25	622 1/4	+14 1/4	623 1/2	607 3/4	613	628	601 1/2	603 1/2
WH25	562 1/2	+17 1/4	564 3/4	544 1/2	553	574	543 1/2	548 3/4
WK25	576	+17 1/4	577 3/4	558 1/2	566	584	556 1/4	559 1/2
KWH25	580 1/4	+19 1/4	582	560 3/4	572	586	558	556
KWK25	590 1/4	+19 1/4	591 3/4	570 1/2	582	596	567 1/2	564 1/4
SMH25	309.8	+8.20	310.8	301.6	305.00	313.00	306.10	300.90
BOH25	44.97	-0.16	45.41	44.7	44.75	46.50	43.83	42.81

>>Interested in more commentary by Joe Mauck? Go HERE

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