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Wkly Futures Market Summary For 1.27.2025

SOYBEANS

The soy complex is starting the week lower after some beneficial rains fell in Argentina over the weekend, and an overall risk-off attitude in the macro markets with the US stock market sharply lower this morning. Argentina’s export tax decrease goes into effect today, lasting through June, and that is a bearish factor that encourages Argentine farmers to sell. Argentina’s Economic Minister said eliminating the export tax is the eventual goal when fiscal conditions allow. Argentine farmers are likely planning to increase their planted area for the next season, knowing the tax burden will be less onerous.

SOYBEAN MEAL

A new bearish force hit the soymeal market late last week when Argentina’s government announced a reduction in the soybean and soybean product export taxes to help drought-stricken farmers cope with low prices. The soybean export tax was lowered from 33% to 26% starting January 27 and lasting through the end of June. The tax on soybean products was lowered from 31% to 24.5%. The soy complex reacted negatively to the news, and meal prices gapped lower on the March futures daily chart late last week.

CORN

March corn has taken out last week’s low this morning, starting the week with a bearish tilt. Argentina’s lower export taxes are in effect today, incentivizing farmer selling. Over the weekend, US deportation flights were not allowed to land in Colombia, a large US corn buyer. Trump quickly threatened heavy tariffs and other punitive actions on the country and government officials. Colombia quickly agreed to Trump’s terms, and the tariffs were dropped.

WHEAT

Wheat markets are lower at the start today, following the weakness in corn and beans. This week, there are some rain chances in the southern Plains for Kansas and Oklahoma, and the 6-to-10 day forecast has warming temperatures in the South with normal to above-normal moisture across the Plains. The 8-to-14 day outlook brings the colder temperatures back into the northern Plains. One of the major private weather forecasters says last week’s cold temperatures may have damaged up to 15% of the Plains winter wheat crop.

CATTLE

Friday’s Cattle on Feed report came in bullish with slightly lower on feed and lower placements, but the market rallied significantly last week going into the report, which may mitigate the upside reaction somewhat this morning. The placement number was the smallest December figure since 2015. April live cattle support now stands at 201.25, and Friday’s strong close in new all-time highs keeps the technical outlook bullish. Total red meat and US frozen beef supplies in December were up 3% and 3.8%, respectively, from November.

HOGS

April hogs closed higher to end last week, and the sharp rally in the beef market will likely make lower pork prices attractive to consumers and retailers. Total US pork supplies in cold storage fell 6.3% in December from the prior year, and pork belly supplies dropped to 34.3 million pounds, down from 56 million in December last year. This may offer a supportive tone to today’s opening, and April has resistance at 89.30.

MILK CLASS III

February Class III milk finished on Friday with a sizable weekly loss after reaching a 7-week low earlier in the week.

ENERGIES

March Crude Oil is lower this morning after falling to its lowest level since January 10 overnight. The market could see pressure today from weakness in the stock market, which is being led lower by tech stocks in the wake of news that the Chinese AI software Deepseek has made significant breakthroughs that threaten the dominance of US AI and chip manufacturers. Overnight, the Trump Administration swiftly reversed plans to impose sanctions and tariffs on Colombia after that nation agreed to accept deported migrants from the US. Colombia last year sent about 41% of its seaborne crude to the US. Last week President Trump announced sweeping plans to boost US crude oil production, and he also reiterated his call for OPEC to cut prices to hurt Russia’s finances and help bring an end to the war in Ukraine. Putin said on Friday that he and Trump should meet to talks about the Ukraine war and energy prices. OPEC+ already has a plan in place to start increasing production in April.

March Natural Gas gapped lower overnight as warmer temperatures set in across the US and the European Commission indicated it would continue talks with Ukraine on natural gas supplies to Europe and that it will include Hungary and Slovakia in the discussions. A warmup in Europe is pressuring demand there as well. The 6-10 and 8-14-day forecasts show a mix of above normal and below normal temperatures across the US, with colder than normal across the northwestern half and warmer than normal in the southeastern half. The EIA gas storage report last week showed a draw of 223 bcf for the week ending January 17, which was smaller draw than expectations calling for -225 to -300.

DOLLAR INDEX

The U.S. dollar index was pressured by investors pulling out from capital markets in light of reduced optimism concerning U.S. AI demand.  In addition, the reversal of U.S. tariff threats limited the outlook for imbalanced capital flows in major U.S. trading partners.

COCOA

March Cocoa is near unchanged this morning, trading inside last week’s range. Ivory Coast cocoa arrivals totaled 52,000 metric tons for the week ending Sunday, up from 34,000 the previous week but down from 53,000 a year ago and below the five-year average of 61,100 for this point in the season. Cumulative arrivals have reached 1.243 million tons versus 1.008 million a year ago and a five-year average of 1.313 million. The increase in arrivals from last week may offer a counter to the narrative that the dry conditions over the past couple of months will lead to a sharp drop in production. World Weather Service reports that thunderstorms parts of southern Ghana late last week have advanced into southern Ivory Coast, bringing a little relief from the hot and dry weather that had been prevailing in West Africa for weeks. Much more rain is still needed.

COFFEE

March Coffee traded to another new contract (and all-time) high overnight, as concerns about the upcoming Brazilian crop prevailed. Estimates were already lowered late last year due to the drought and extreme heat earlier in the year, and the question is whether they be lowered again. Recent rainfall has eased some concerns, but they may have come too late. Previous reports had strong branch growth but poor cherry development. Safras & Mercado said last week that forward dales of the 2025/26 Brazilian crop were about 12% of the expected output versus 19% at this time last year, which may indicate a reluctance to sell on the growers’ part as well as buyers balking at all-time highs.

COTTON

March  Cotton was near unchanged overnight following a rally to its highest level since January 10 on Friday. The market drew support from a second straight week of strong US export sales. A weaker dollar also lent support, as that improves US export prospects. However, the cotton market could see some pressure today from weakness in US equity markets, which are being led by lower tech stocks in the wake of news that the Chinese AI software Deepseek has made significant breakthroughs that threaten the dominance of US AI and chip manufacturers. The export sales report on Friday showed US cotton sales for the week ending January 16 at 348,927 bales for the 2024/25 (current) marketing year and 79,816 for 2025/26 for a total of 428,743. This was up from a strong 317,568 bales the previous week and was the highest in year

SUGAR

March Sugar extended last week’s rally overnight to trade to its highest level since January 10. At the overnight high, the market had rallied 1.87 (11%) from last Tuesday’s 22-month low. The market has recovered dramatically despite news last weekend that India would allow exports for the first time in over a year and that China had halted imports of Thai sugar syrup, which could put more sugar on the market. So far, it appears Indian mills are struggling to secure sales because their asking prices are too high. Last week’s winter storm that brought extreme cold to the cane crops in Louisiana and Florida could increase US import needs this year. Snow cover in Louisiana may have insulated the plants to some degree but not enough to prevent die-off. The next UNICA report on Brazilian Center-South production, covering the first half of January, is due out this week.

METALS

February gold futures are lower today after on Friday advancing to the highest level since October 31. Prices are under pressure despite continuing declines in the U.S. dollar. However, some underlying support remains due to the belief that the Federal Reserve remains on track to ease credit conditions further this year.

March silver futures are lower but are trading within a narrow range since reaching a one-month high on January 16. The metal’s movement was influenced by the U.S. Federal Reserve’s expected stance on monetary policy, with optimism surrounding looser policies counterbalanced by concerns about weaker industrial demand for silver.

March copper futures are lower, extending losses from the previous session despite the bullish influence of a weaker U.S. dollar. The downturn was also fueled by disappointing economic data, including an unexpected contraction in manufacturing activity in China, which is a key copper consumer, and a sharp slowdown in the country’s services sector growth. Additionally, caution was heightened ahead of China’s week-long Lunar New Year holiday.

EQUITIES

Stock index futures are sharply lower due to mounting concerns over the U.S.’s dominance in AI, which weighted heavily on market sentiment.

INTEREST RATES

Futures are higher due to flight to safety buying, as a tech stock sell-off was fueled by concerns over the U.S.’s dominance in AI. 

The U.S. Treasury will auction two and five-year notes.

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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