Written Commentary
OPENING COMMENTS
MACROECONOMICS:
The consumer Price Index rose this morning to 3% year-over-year, which is the highest inflation has been since July of 2024. Still not as burdensome as over 9% in July of 2022, but still caused reaction to the dollar, the equity and commodity markets this morning. CPI month-over-month was expected to be 0.3% but was reported at 0.5%. Today’s report gives the Fed more reason to keep interest rates at the current 4.25-4.50%. The market is now expecting the next change to interest rates to be October or December 2025 rather than September.
AG FUNDAMENTALS:
Yesterday’s USDA WASDE report provided no fuel for market bulls in the row crop markets. It highlighted lack of Chinese demand, left US ending stocks untouched and conservatively cut Argentina’s production while leaving Brazilian bean alone. The USDA left corn demand unchanged even with high ethanol production and continued corn export demand. The CPI data this morning allowed the dollar to jump above 108.50 briefly on the index which is also putting pressure on commodity prices. Wheat is flat despite the cold winter storms passing through the US wheat country. Weather over the next 2 weeks in South America looks to be cooperative for bean harvest to progress in Brazil and drought relieving rains falling in stressed areas of Argentina. Crude oil is dropping this morning, falling to $72/barrel. Ethanol production and stocks will come out later this morning.
This Morning’s Consumer Price Index (CPI) Report showed inflation higher than expected for the month of January. The market was expecting a 0.3% increase of consumer prices and +0.5% was reported at 7:30 am CST this morning. The Dollar jumped off the news, equity markets reacted lower, and the fed is still expected to leave interest rates unchanged in the March fed meeting.
EXPORT & WORLD NEWS
South Korea purchased about 30K MT of US milling wheat yesterday. South Korea is also looking to purchase up to 120K Mt of animal feed corn as well.
Malaysian palm oil futures were up 28 ringgit overnight, now at 4621.
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)
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