1.10.25 Tredas Recap

Weekly Action:

March25 Corn up 20 at $4.71

March25 Beans up 34 at $10.26

March25 KC Wheat up 13 at $5.51

Feb25 Hogs up 1.70 at $82.50

Feb25 Fats up 4.80 at $198.80

Jan25 Feeders up 4.75 at $272.50

Dec25 Corn up 14 at $4.50

Nov25 Beans up 25 at $10.31

July25 KC Wheat up 2  at $5.69

Grains:

This week’s major news was yet another shockingly bullish report by the USDA.  The largest change on the corn balance sheet was the 3.8 bushel decrease in 2024 yield to a still record of 179.3 bpa.  This brought ending stocks down to 1.54 billion bushels.  That’s nearly 400 million bushel less than the November estimate. 

This is bullish news.  No doubt about it.  But how bullish?  Managed money was long 230,000 contracts or nearly 12 billion bushels as of 12/31/24.  Corn rallied 20 cents this week which is easy to assume funds were active buyers going into todays report and even after. 

The below graphic shows corn ending stocks in the January report aren’t that far from the average for the last decade.  Exports have been a hot topic the last few months.  Who doesn’t want to buy US high grade corn sub $4.50.  On that note, the last two weeks have been disappointing across the entire grain complex.  Exports last week were at marketing year lows. 

Naturally corn basis collapsed Friday on the back of a 15 cent futures rally.  End users are filling up here for Jan and into Feb on cash sales.  Counter actively, the carry from March to May has improved to 9 cents from a nickel just a month ago.  Get your cash needs moved and look out to secure some carry and get yourself out of this weaker basis market. 

Soybean yield also took a hit from the USDA in the tune of a bushel per acre.  This brings our endings stock back near last year’s levels to 380 million bushels.  Is this the catalyst to the acre war we all know Soybeans need?  Only time will tell, but today, the US farmer is still going to lean heavier corn vs soybeans at a 2.3:1 ratio. 

As mentioned earlier, our Soybean exports have been steadily slowing since what we call the “pre election” blitz of US export sales.  Seasonals all point to a slower pace as South America harvest nears. 

Another quiet killer of US exports has been the US dollar.  It’s been on a constant move higher since hitting a low in October.  As much as this USDA report points towards futures strength, the in-depth demand outlook is bleak. 

Weather:

Attention will be full force on South American weather into the finish of their first crop.  The graphic below shows the midday GFS adding moisture to a dryer Argentina in the 11-15 day forecast. 

The United States remains dry in the Central US with no signs of relief.  Even though it’s very hard to get excited about US dryness prior to planting intentions.  Spring rains can make up for what we lack in snow in a hurry and have the last two years. 

Economy:

Stock markets are getting pummeled to end the first full week of 2025 as the US added 256k jobs in December, 100k more jobs expected. Inflation is back on the rise with updated data to be released next Wednesday.  This unfortunately will have a negative impact on any rate cuts in 2025.  None the less, they say economy is roaring. 

California

California wildfires have engulfed the Golden State as 9,000 homes and other structures have been destroyed.  Expectations are in the 20 billion dollar range for current damages.  The multitude of fires have covered over 20,000 acres.  Serious situation there for the West Coast.  Our hearts go out to any families being affected by the wildfires. 

Count your blessings and have a good weekend!