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Morning comments 1/13/24

• Corn and soybeans are into new highs for the move. Calendar spreads are firming

• Lots of “eye-catchers” from Friday . . . While the 3.8 bpa smaller corn yield at 179.3 was still a record, surprising how several in the trade were so adamant in late summer about how large yields were. The USDA’s 25 mbu cut in exports due to “lower supplies” seems a bit weak. Regardless, with trade estimates as much as 100 mbu higher, there is likely to be quite a bit of potential market volatility remaining. Interesting the USDA took Brazil’s export down 3 (2, 23/24 & 1 for 24/25).

• China imported the most soybeans on record in 2024 as buyers concerned about rising U.S.-China trade tensions rushed to secure U.S. supplies ahead of President-elect Donald Trump's inauguration. The world's biggest buyer of the oilseed imported 105.03 million metric tons of soybeans in 2024, a 6.5% increase from a year ago, according to customs data released on Monday. Record annual import volumes were driven by declining CBOT soybean prices in 2024, strong crushing margins, and buyers' preparations due to trade war concerns, said Rosa Wang, analyst at Shanghai-based agro-consultancy JCI. For December, arrivals dropped 0.2% to 7.94 million tons from the same month a year earlier, according to Reuters calculations of customs data.

• Brazilian agribusiness consultancies shared contrasting views on Friday as they released fresh estimates for the country's 2024/25 soybean crop, with Safras & Mercado hiking its forecast while Patria AgroNegocios trimmed its projection. Both firms still forecast the world's largest soybean producer and exporter to harvest a record crop this year, but Patria noted that adverse weather in some key states should keep production below the level of 170 million metric tons. Patria pegged Brazil's soybean output this season at 167.94 million tons, up from 147.74 million in the previous cycle - when farmers grappled with bad weather - but below the 170.41 million it had estimated in December. The head of the consultancy firm, Matheus Pereira, said the lower forecast was related to a drop in "crop quality" in some large producing states, such as Mato Grosso do Sul, Parana and Rio Grande do Sul.

Corn:
• March corn futures closed at $4.7050 on Fri., which is the highest settlement price since June 18
• ATI Research: USDA reduced annual corn feed/residual use by 50 mbu to 5.775 in the Supply/Demand report or about 30 million less than last year
• this would imply Dec-Aug consumption of 3.447 bbu, 122 MORE than last year, which seems aggressive given HRW/Corn prices.
• Export Inspections to be released at 10 am CST. Corn—53.3 needed; 33.4 last week. Milo—4.9 needed; 0.04 last week
• 100% of Argentina’s early-corn is forecast to receive below normal rainfall over the next 14 days
• Funds buy 30 K as USDA cuts corn yield a record-tying 3.8 bpa

Soybeans:
• Multi-week highs were made in the soy complex on Friday
• March beans closed at $10.2525—highest price since Nov. 11
• March soyoil closed at 45.58—highest price since Nov. 18
• ATI Research: There appears to be some room for a reduction in U.S bean exports; China’s “known” unshipped book of 85 mbu is a 100+ smaller than a year ago AND, is 2nd only to the Trump era trade war of 2019/20 when O/S sales to China were only 64 million bushels at this point in the year
• U.S. Export Inspections at 10 am CST 20.7 needed; 47.2 last week
• 100% of Argentina’s beans to receive below normal rain the next 14 days
• Funds bot 15 K SB, 20 BO, even SM. Jan Board Crush, +$.06 @ $1.21

Financials:
Strong jobs # has Wall Street worried about Fed rate policy.
WALL STREET FUTURES - Weaker:
Dow, -193; S&P, -39.5; NAS, -224
Asia - Weaker:
Nikkei, -1.05%; Shanghai, +0.25%;
Hang Seng, -1%
EUROPE - Mixed:
DAX, +0.92%; FTSE, -0.47%; CAC +0.89%
February Gold: $-10.7 @2,704
February CRUDE: +$1.67 @$78.24
Mar U.S. Dollar Index: +0.418 @109.487