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↓ Mar'25 | 5.32 3/4 | -1/4
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Night Trade as of 7:00 am CST. |
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Buy Signals - Soybeans - Day 2
- Chicago Wheat - Day 2
- Meal - Ended Day 3
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During the past 12 months - Soybeans had 6 Buy Signals lasting 38, 12, 31, 17, 11, and 6 days.
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Chicago Wheat had 9 Buy Signals lasting 3, 3, 7, 2, 29, 4, 8, 3, and 5 days.
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Corn remains above the 20-day
Soybeans rebounded off new lows Wheat continues to struggle Financial and commodity markets settled yesterday following the large selloff on Wednesday triggered by the Federal Reserve signaling fewer interest rate cuts next year. While the crop markets rebounded off the new lows, they were weighed down by the Dollar surging to two-year highs following the Fed comments.
Corn fell down to the support of the green line 20-day moving average yesterday, but bounced higher, continuing to demonstrate a bit of positive strength. Soybeans fell to a new contract low and triggered a Buy Signal in our system before beginning to reverse higher. This is a strong Buy Signal to take re-ownership of sold bushels. Give us a call to talk to a broker if you’d like to discuss this strategy. Meal prices surged higher yesterday and again overnight, moving all the way back to the 20-day average, and ending the meal Buy Signal this morning. Soyoil, on the other hand, fell to new lows yesterday and was little changed overnight.
Wheat prices have been on a steady decline since December 10, taking the brunt of the impact from the strengthening Dollar over that time period. The wheat story should turn more positive eventually, as Russian production is to be at its lowest in four years. But it may take time for that story to be reflected in the markets and more difficult with the Dollar at such a strong level.
Weather conditions remain favorable in Brazil. All signs continue to point towards a record soybean harvest. It has been drier in key regions of Argentina, with below normal precipitation forecast over the next two weeks. This remains one of the few potential bullish stories on the horizon. We’ll see what develops over the next couple weeks.
Overall, we continue to trudge through this period of holiday malaise and lame duck US leadership. The inauguration is officially one month away. Expect more choppy depressing waters ahead until we move through the holidays and into the new year and new Administration. Government shutdown looming
US House Speaker Mike Johnson is 0-2 this week in passing a short-term spending bill. The first attempt was shot down for being too large by president-elect Trump and his influential ally Elon Musk. Johnson then presented a trimmed down version of the bill, only to have 38 Republicans vote with Democrats in opposition. We may be in store for another partial government shutdown. It seems unlikely the House can pass a spending bill and send it through the Senate before the midnight deadline tonight. Hopefully, you are not planning to visit national parks over Christmas this year. If there is a shutdown, it could potentially delay upcoming USDA reports.
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Other Cotton, sugar, and rice all declined further and remain firmly in Buy Signals again today. Rice fell to its lowest level since mid-November as India’s rice reserves reached a record 44.1 million tons, multiples higher than the government target of 7.6 million tons. Crude and heating oil prices fell more than -1% overnight, while natural gas prices surged +2% higher. WTI crude slipped below $69/barrel. |
Outside Markets
The Personal Consumption Expenditures Index (one of the Fed’s key inflation readings) increased 0.1% month over month in November. The inflation reading was down from 0.2% the two previous months, and below trade expectations for a third consecutive month of 0.2% increase. On an annual basis, the index was +2.4% higher, just below trade expectations for 2.5%. Core PCE inflation was steady at 2.8% (annual), while forecasts were for 2.9%.
Equities: The Dow Jones narrowly avoided another losing session on Thursday as Wall Street pulled itself together a day after the Federal Reserve cast doubts on next year’s interest rate reductions.
The Dow gained more than 15 points on Thursday to at least stop the retreat that had the Dow down around 1,100 points on Wednesday. At the same time, however, the Dow was up more than 400 points at one point during the session. Nasdaq and the S&P 500 were also a bit higher at the end of the day. It appears Congress will be unable to prevent a government shutdown beginning Friday, but the economic news was generally encouraging on Thursday. First time unemployment claims were 220,000 for the week ending Dec. 14, down from 242,000 the previous week and below analysts’ predictions of 230,000.
The National Association of Realtors said sales of previously owned homes in November were up 4.8% from October and 6.1% above November 2023 sales. CNBC estimated a large chunk of November’s closed sales originated in September when the Fed made its first rate cut of the year and mortgage rates were at an 18-month low. Dollar: The Dollar Index scored its second 12-month high in two days on Thursday as the world financial markets adjusted to the idea of U.S. interest rates remaining higher than anticipated in 2025. The Index reached 108.2 during the session and was still above 108.1 at the end of the day.
The dollar also improved against the yen and the euro during the day. Unlike the Fed, the Banks of Japan and England left their interest rates unchanged on Wednesday. It was also reported that banks in some of China’s major cities have raised mortgage rates for the first time since 2021 despite urgings from Beijing to cut rates and boost home sales.
Treasuries: The bond market took off again Thursday in the wake of the previous day’s Fed announcement. The 10-year yield built on Wednesday’s explosive gains with another uptick to around 4.57%, levels previously seen early last summer when the Fed was stubbornly holding rates steady to tamp down inflation. The 2-year lagged behind its 10-year cousin at around 4.32%.
Reuters noted in an analysis Thursday that while the Fed is now indicating only two rate cuts in 2025, the state of the economy and the anticipated turnover among Fed officials could result in less unanimity when the Open Market Committee debates rate cuts next year. The House capped off the day late Thursday by Energies: Oil markets were cautious on Thursday in the aftermath of the Fed’s rate cut, and by equally conservative actions by other major central banks. The prospects of a worldwide economic slowdown in 2025 gaining credibility. February WTI slumped more than a half-dollar and fell below $70.
January gasoline fell early and remained a few cents over $1.90. January natural gas futures jumped for the second time in as many days, reaching nearly $3.60 after the U.S. Energy Information Administration reported a 125 billion cubic feet storage withdrawal last week.
Meanwhile, the Biden administration took a late dig at the incoming president Thursday when the EPA approved California’s plan to ban the sale of gasoline-only vehicles in the next decade. The Golden State plans to allow only electric vehicles or hybrids on the lot beginning in 2035. President-elect Trump had made restrictions on sales of fossil-fuel cars and trucks a major campaign issue.
Metals: Gold futures continued to sag Thursday. The Fed’s cautious approach to 2025 has pulled away support from gold for the past few days, and prices fell to the $2,600 mark on Thursday. March silver slipped below $30 while March copper was sitting just above $4.07. Copper remains trapped by sluggish economic news out of China and growing prospects of a slowdown in the United States and Europe. At the same time, analysts said this week that copper and the rest of the base metals market were still on track for overall gains in 2024, reversing the losses for the prior two years.
Livestock: -Cattle futures sagged Thursday with traders looking ahead not only to the Cattle on Feed report on Friday afternoon, but also the holiday break next week and the year’s end. Live cattle futures continued to slide on Thursday thanks to steady technical selling. February lost nearly $2 and came in below $187 while December lost nearly a dollar with the contract expiring on the 31st.
Feeder cattle also shed another couple of dollars and ended the day with January and March futures bunched together north of $254. The hog market chopped around a bit but was generally lower with February off nearly a dollar at $84.62 and a dollar under the day’s high. Analysts noted a combination of soft export sales and a lack of aggressive domestic buyers. Next week begins with the Cold Storage report and quarterly Hogs & Pigs on Monday, just in time for Christmas.
The Cattle on Feed report being released Friday afternoon was projected at an on-feed herd of 11.975 million head and around even with a year ago. November placements were predicted at 94.9% of a year ago with marketings 98.2% of last year. Although the projected moves weren’t dramatic on their own, analysts note they show overall tighter supplies heading into 2025.
Live Cattle: Cash prices stuck around $195 with a smattering of trading reported. The slaughter for the week hit 485,000 on Thursday, modestly lower than the 489,000 at the same time last week. The cutout was particularly dynamic on Thursday as choice jumped nearly $6 and above $320, nearly $5 over the 5-day average. At the same time, the select cutout lost $1.44 and came in at $284, more than $36 below choice. The load count was a relatively light 98.
Feeder Cattle: The CME Index was around $262 heading into the end of the week. Many auctions will be closed all of next week. The Woodward, Oklahoma session Thursday reported moderate demand and slightly soft steer prices. At Ogallala, Neb., steers were as much as $15 lower. Lean Hogs: Cash prices were mostly steady Thursday and slightly above $78 as buying remained leisurely. The slaughter as of Thursday stood at 1,950,000 versus 1,936,000 a week ago. The late Thursday cutout was down slightly at $96.15. The individual primals were mixed with rib down more than $4. |
Weekly Export Sales Export sales were generally higher last week with corn and soybeans increasing more than 20% and wheat sales up more than 50% from the week before. Sales for the week ending Dec. 12 were about as expected with the Christmas holidays likely to slow the pace next week.
The USDA waited until Thursday to announce its first flash sale of the week, a split order of 227,200 metric tons (MT) of soybeans to unknown destinations made up of 152,200 MT for 2024-25 and 75,000 MT for 2025-26. There were also media reports of lesser amounts of milling and feed wheat sold to Japan and South Korea this week.
The United States apparently also earned a piece of this week’s wheat tender from Algeria. Reuters said Wednesday the Algerian grain agency OAIC acquired 350,000-400,000 MT of durum wheat, most of it from Canada and the rest from the United States and Australia. Some sources said the tender was actually as much as 500,000 MT.
Corn: Corn sales for 2024-25 jumped 24% during the week ending Dec. 12 to 1,174,600 MT, which was within analysts’ expectations but also 10% below the 4-week average. Mexico and Japan continued to be major buyers although both sourced portions of their respective hauls from unknown destinations. Another 2,500 MT of 2025-26 corn was sold to the Nicaraguans. Actual export shipments for the week were down 11% at a respectable 1,054,500 MT.
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Soybeans: Sales for 2024-25 rose 21% to 1,424,200 MT; however, that was also 27% below the 4-week average. China’s purchases were a bit lower at 648,200 MT, which included a 66,600-MT decrease and 464,000 MT switched from unknown destinations. The unknowns added another 374,500 MT in purchases to their inventories. Export shipments during the week were down 9% from the week before at 1,686,300 MT. Soybean meal sales jumped 48% last week to 261,600 MT, including 65,500 MT sold to Canada. Soybean oil sales tumbled to 6,000 MT, most of it to Mexico. |
Wheat: Sales for 2024-25 also met expectations at 457,900 MT, even with a 58% increase from the previous week. The total was also 16% over the 4-week average. The Philippines and Venezuela both acquired more than 80,000 MT. Export shipments were also higher at 405,700 MT and apparently included Venezuela’s purchase of 80,800 MT. |
Meat: Beef and pork sales were lower for the week. Beef sales of 7,200 MT were 35% below the previous week and 5% under the 4-week average. South Korea and Japan were the top buyers despite reductions of around 1,000 MT. Beef shipments, however, increased 6% to 15,900 MT, including 2,800 MT to China. Pork sales for 2024 fell 50% last week while 2025 sales were a net 5,800 MT. The tab for Mexico included 2,800 MT for this year and nothing for 2025. China acquired 900 MT for 2024 and also made a reduction of 900 MT for 2025. Last week’s pork shipments were down 7% to 31,600 MT.
Others: Upland cotton sales for 2024-25 increased 27% to 194,900 bales, but that was 19% under the 4-week average. Another 6,900 bales for 2025-26 was sold to Mexico. Pima sales were a mere 500 bales while 12,000 bale were shipped to India and other assorted customers. Sorghum sales fell sharply to a marketing-year low of 59,200 MT while 142,000 MT was shipped to China. Sales of 2024-25 rice rebounded to 103,000 MT, up 74% from the 4-week average. Mexico, Panama and Haiti were the leading buyers in the rice market. |
US Drought Monitor Last week’s precipitation resulted in some significant improvements to the dryness in the Midwest and Plains.
The U.S. Drought Monitor update on Thursday showed dry conditions finally being rolled back in the Corn Belt and upper Midwest, although Iowa, Nebraska and other states along the upper Mississippi River continued to be dominated by abnormal dryness and short-term drought conditions. “The wettest areas were in Missouri, southeast Iowa into Illinois, Indiana, Ohio and western Kentucky,” said the Monitor. “Most of western Iowa, Wisconsin, Michigan, and Minnesota were drier than normal for the week ending Dec 17.” The southern Plains continued to normalize while dry and cool conditions to the north left a sizable patch of drought from northern Kansas to Montana and western North Dakota still locked in by stubborn drought.
Looking ahead, the 6-10 day forecasts calls for warmer-than-normal temperatures over most of the nation, particularly in the upper Midwest and northern Plains where winter wheat received a precipitation boost back in November before settling into dormancy. “But we expect dryness stress to creep up on some of the slow-growth area as we get deeper into winter,” one analyst said.
Forecasters were also watching a robust “atmospheric river” system setting up in the Pacific Northwest. The projected soaker will likely hammer next week’s holiday travel period and could also send stormy weather inland. The Climate Prediction Center said the system will likely result in heavy rain along the coast, including northern California, as well as snow at higher elevations.
The Monitor concluded: “Over the next 5-7 days, it is anticipated that the best chances for precipitation will be over the Pacific Northwest, Midwest, and the eastern third of the United States. Much of the central and southern Plains, Southwest, and Rocky Mountains may expect little to no precipitation.” Current map |
Source: National Drought Mitigation Center, NOAA, USDA |
USDA Flash Sales From this morning's USDA daily exports sales notice |
US – Thursday's observed precipitation |
European model – US 7-day precipitation forecast |
US 15-day precipitation forecast relative to normal |
Brazil 15-day precipitation forecast relative to normal |
Argentina 15-day precipitation forecast relative to normal |
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Roach Ag. Marketing is a full service advisory firm founded in Perry, Iowa back in 1978 to help farmers do a better job of marketing their crops and livestock. Learn more...
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Telephone: 800.622.7628
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E-mail: dailygrainplan@roachag.com |
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