Written Commentary
GEOPOLITICS:
Robert F Kennedy Jr. is scheduled to face the Senate today in his first confirmation hearing to become the Secretary of Health and Human Services. In this position RFK Jr. would oversee the Centers of Disease Control and Prevention, the Food and Drug Administration, the National Institutes of Health and the Centers for Medicare and Medicaid Services. He will likely be grilled on topics like vaccines and abortion today; while many in the Ag community will listen for his stance on glyphosate causing cancer and his disdain for GMO crops, the division between organic/regenerative producers and large commercial producers, and how regulation may lower production and increase food prices. Some optimistically say his nomination would be good for Agriculture long term because his term could help revitalize the public’s overall view of agriculture practices in a positive way.
MACROECONOMICS:
The market has priced in the possibility of 2 more 25 basis point cuts in 2025, but there is over a 97% probability it ain’t gunna happen today. In President Trumps address to the Economic Forum in Davos he pressured the Saudis and OPEC to lower oil prices and followed that up with a demand that the fed lower interest rates. Federal interest rates will most likely go unchanged today, but Jerome Powell’s “tone” in his proceeding comments will be what investors pay most attention to. It would make sense for Powell to soften his tone on rates and possibly express his willingness to cut rates within the year. If the fed did cut rates today it could create major volatility across all markets. The equity markets would surly react to a surprise cut as it works through the most recent AI DeepSeek developments. Apple earnings will come out tomorrow along with unemployment claims.
AG FUNDAMENTALS:
EIA ethanol production and stock report will come out later this morning. Ethanol stocks have been at historical highs and margins are tight leaving some to believe production should decrease. Export Sales will be out tomorrow, the Illinois River is covering in ice at the moment and the river levels in St. Louis is sitting near -2 ft which restricts our ability to load full drafts. Bulls are trying to run with the dryer than normal weather expected in South America over the next week or two. Aside from the soybean crop health, clear weather should help trailing progress of the second corn crop planting back to a more normal pace.
The 30-Day Precipitation Anomaly Map shows most of South America’s growing regions have experienced less than normal rainfall in the last month.
The 7-Day Precipitation Forecast Anomaly Map has almost all of South America’s growing regions receiving less than normal rainfall voer the next 7 days.
Export & World News
Tunisia is looking to purchase up to 100K Mt of soft milling wheat. and 100K MT of durum wheat in an international tender. Japan is also looking for about 90K MT of food-quality wheat.
Malaysian palm oil futures are closed today and tomorrow.
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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