Written Commentary
MORNING AG OUTLOOK
Fed day. Grains are mixed. US stocks are higher. US Dollar is higher. Crude is higher. US Fed is expected to lower rates 25 basis points today but could pause in 2025 if inflation rates remain elevated. US Nov industrial production dropped and is now down for 3rd straight month. House proposed extending farm bill, allowing E 15 year round and small farm debt relief.
SOYBEANS
SH is near 9.68. 9.65 is next support, then 9.38. SH is becoming oversold. Dalian soybean, soyoil and palmoil futures were lower. Rains are forecast for most of Brazil and Argentina. Confidence in a record 2025 South America soybean crop is growing with rains in Argentina. World vegoil prices continue in retreat on demand worries. US and Brazil are lowering soybean export prices to compete for nearby China demand. China Sino Grain bought 12 US soybean cargoes to Feb-Mar. USDA announced 132 mt US soybeans were sold to unknown and 187 mt sold to Spain.
CORN
CH is near 4.44. Dalian corn futures were lower. Front loaded US corn export commit and strong ethanol production offers support. Increase in Brazil ethanol use and drop in EU quality also offers support to corn prices. US House proposed using E 15 year-round. That would add 35-40 mil bu corn use. Potential for record 2025 global supply offers strong resistance. Total South America corn supply could be up 240 mil bu vs ly. Some now est total Argentina corn supply at 55 mmt vs 52 ly. Mrch-Feb,26 exports could be 36 mmt vs 33 this year. USDA announced 170 mt US corn to Mexico.
WHEAT
WH is near 5.46. KWH is near 5.53. MWH is near 5.97. A strong US Dollar, Russia suspending sales to Syria, and S Hemisphere arrivals supports the record fund short. But 2025 exports from the EU/Russia could be 15 mmt below last year, and Indian domestic prices hit new highs. Matif wheat was higher as market tries to squeeze out record fund short. Russia wheat futures hit 3 month low. Some feel tight US SRW supply and good outlook for US 2025 HRW crop could suggest WK trading over KWK.
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