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Wkly Futures Market Summary For 1.21.2025

SOYBEANS

A significant drop in Argentine crop conditions last Friday turned the bean market positive. President Trump’s decision not to implement tariffs immediately sent the US dollar lower and gave the soy complex an additional boost overnight. While signing executive orders last night, Trump did mention a February 1st date for potential tariffs on Canada and Mexico. Soy complex traders will be watching for any indication that the new administration will limit renewable diesel feedstock imports, like used cooking oil from China.

SOYBEAN MEAL

Soybean and soymeal prices started the week stronger after the newly inaugurated Trump Administration signaled a pause on tariff implementation until after trade agreements can be reviewed. However, Trump hinted at a potential February 1st timeline for imposing tariffs on Canada and Mexico, which could be enacted without congressional approval if the president invokes a national economic emergency. In 2023, Canada imported over 1 million tonnes of U.S. soymeal, while Mexico imported 1.5 million tonnes in the 2023/24 marketing year, highlighting the importance of these markets. A pre-inauguration call between Trump and Chinese President Xi, described as a “good talk,” helped ease fears of an immediate trade war.

CORN

President Trump hit the ground running yesterday, as expected, but his decision to delay the implementation of tariffs was seen as a positive for the grain markets. The US dollar fell sharply, and US corn exports were already competitive through early summer, so any further drop in the dollar only enhances the US’s favorable position. The current price rally is likely encouraging additional US corn acreage this spring. China customs data showed that Chinese imports of corn from all origins in 2024 were down 49.7% from the previous year.

WHEAT

Wheat prices are starting the week modestly stronger despite a 6-week low in EU prices yesterday. IKAR reported Russian prices are down $3 this week to $234 a tonne. Interfax says Ukraine’s grain and oilseed exports since July have reached 24.19 million tonnes, up 2 million year-over-year. Putin indicated to Trump he was ready to talk about the war in Ukraine.

CATTLE

Cold temperatures in the Plains are a supportive factor for this morning’s live cattle opening, as was the strong finish to cash trade last week. In addition, Trump’s decision to delay the implementation of tariffs has pushed the US dollar lower, providing additional bullish support.

HOGS

Trump’s decision to delay the implementation of tariffs and the sharp decline in the US dollar overnight are positives. However, the technical outlook weakened with Friday’s sharply lower close, and prices must turn higher to start the week to avoid further fund liquidation.

MILK CLASS III

February Class III milk finished on Friday with a mild weekly loss after reaching a 3-week low earlier in the week. The USDA reported that farm-level milk production is generally increasing nationwide. Farmers in the East and Central regions are managing cow comfort during cold winter temperatures.

ENERGIES

March Crude Oil is sharply lower this morning in the wake of a slew of executive orders by President Trump on his first day. Trump did not enact tariffs on Day 1, but he said he told federal agencies to investigate unfair trade practices by other nations. He said was thinking of proposing 25% tariffs on Mexico and Canada on February 1. US is a net importer of crude from Canada, so this action could tighten US supply but also leave more on the world market. It could also be a negotiating tactic. Trump also laid out a plan to accelerate oil, gas, and power permitting in order to maximize (already record) US energy production. He also said he would pull the US from the Paris climate agreement. He did issue an executive order repealing efforts by former President Biden to block oil drilling in the Arctic and along the US coasts. And he also said his administration would probably stop buying oil from Venezuela. He also promised to refill strategic reserves. The mix of statements adds to uncertainty and could keep the market volatile for a while.

March Natural Gas gapped lower overnight and fell to its lowest level since January 15. A deregulatory environment under President Trump could be supportive to Natural Gas, as it could include an expansion of US LNG exports. The US is experiencing extreme cold this week, but a warmup is coming. The 6-10 day forecast mostly normal temperatures from the Plains to the east coast, with some above normal temps in Minnesota and Iowa as well as in parts of the southeastern US. Below normal temperatures are expected from the western Plains to the West Coast.

DOLLAR INDEX

The U.S. dollar index declined after U.S. President Donald Trump stated he was considering 25% tariffs on Canada and Mexico as early as Feb. 1. 

COCOA

March Cocoa gapped higher overnight and traded to its highest level since January 6, supported by a drop in  Ivory Coast port arrivals. Arrivals totaled 34,000 metric tons for the week ending January 19, down from 48,000 the previous week and 41,000 a year ago. Cumulative arrivals for 2024/25 have reached 1.191 million tons, up 24.7% from 955,000 (+24.75) from a year ago but below the five year average of 1.252 million. Ivory Coast farmers told Reuters that rains were scarce in most cocoa regions last week. This is their dry season, so dry patterns are not unusual, but growers have been pretty consistent in complaining, and the conditions seem to be taking a toll on production. Output typically falls off this time of year as the main crop passes its peak.

COFFEE

March Coffee edged higher overnight and traded to its highest level since December 19. The trade is not convinced that recent rainfall in Brazil has come in time to help the upcoming crop. Western Minas Gerais saw light to moderate rainfall over the past four days, but the eastern half was dry. World Weather Service said the drier pattern may benefit many areas that may have become a little too wet in recent weeks. Rain frequency and intensity is expect to be notably lighter for a while. Indonesia rainfall could see locally heavy rainfall with pockets of flooding possible at times.

COTTON

March Cotton gapped higher overnight after a reversal from contract lows late last week. The export sales report came in better than expected last week, with cotton sales reaching 317,568 bales for the week ending January 9 up from 137,382 the previous week and the highest since November 21. Cumulative sales are still dismal, but the improvement was enough to lift the market off contract lows. This has been a pattern this year, where prices fall, sales improve, and the market sees a modest rally only to resume its downtrend. The dollar was sharply lower on Friday, which also improves the export outlook.

SUGAR

March Sugar is sharply lower this morning on news that India has indeed lifted its ban on sugar exports. Reuters reported over the weekend they will allow 1 million metric tons of sugar exports for the 2024/25 marketing year (October-September). Talk that such a move was coming had pressured the market for the past couple of weeks¸ and confirmation sent the March contract to its lowest level since March 2023. This move follows a suspension of exports in October 2023 and is viewed as an attempt to support domestic prices in India. Trade houses have forecast India’s 2024/25 production to fall to 27 million tons from 32 million last year and below annual consumption of around 29 million, but some are viewing the move to allow exports as an indication that their production is higher than previously forecast.

METALS

February gold futures advanced to the highest level since December 12 in the overnight trade. However, some selling pressure has developed more recently despite weakness in the U.S. dollar. Traders remain focused on the potential effects of U.S. President Donald Trump’s policies during his second term. Trump suggested the possibility of imposing 25% tariffs on Mexico and Canada starting next month, although he did not offer a timeline for tariffs on China. These tariffs could spark a trade war, boosting demand for safe-haven assets like gold.

Silver prices are being supported by ongoing worries about potential supply shortages, particularly in London storage vaults.

In the overnight trade March copper futures advanced to the highest level since December 12. However, futures  declined to the $4.270 level per pound on Tuesday morning, reaching a one-week low on Trump tariff talk.

EQUITIES

Stock index futures are higher even as President Trump pledged to impose tariffs up to 25% on Canadian and Mexican imports as soon as February 1.

INTEREST RATES

Futures are steady at the front of the yield curve, and are higher at the long end of the curve.

Signs of cooling U.S. inflation have increased expectations for a more dovish Fed policy, although there is a 99% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at 4.25% – 4.50% at its January 29, 2025 policy meeting, and there is a 1% chance of a 25 basis point reduction.

Please contact us at 1.877.690.7303 or via email at sales@admis.com for any questions or comments on this report or would like more information about ADMIS research. 

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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.

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