Tuesday, December 3, 2024
Closing Markets: Corn -0.25. Beans +6.50. Wheat +0.25.

2024 drying charges have been mailed and are due by 1/31/2025. If paying for 2024 expense, please mail before December 18th to avoid USPS delays.

Market Recap:

Good afternoon. Sideways trade in the corn and soybean markets continued on Tuesday, as another day has passed with little of note for the bull camp to sink their teeth into. Regardless, the soy complex still managed to close in the green, while corn and wheat markets closed within a penny of where they ended last week for the second consecutive session.

CH closed at 4.32 1/4 on Tuesday, down 1/4 of a cent. CK was down a penny at 4.38. SF finished at 9.91 3/4, up 6 and 1/2 cents. SH was up 6 1/4 at 9.97 1/4. WH closed at 5.47 1/2, up 1/4 of a cent. Products closed higher, January soybean meal closed at 290.40, up $2.50/ton, and January soybean oil closed at 42.14, up 72 points. Inside day for meal. Livestock markets were again mixed, February live cattle closed at 189.07, up $1.15, January feeders closed at 259.30, up $2.45, and February hogs closed at 87.85, down 10 cents. Inside day for feeders. Outside markets are mixed, crude oil futures are up $1.70-1.90/bbl, the Dow Jones index is down 70 points, and the US$ index is down 5-10 points. The S&P500 is unchanged and the NASDAQ is up 30 points. Inside day for the $ index.

Spreads were mixed/higher on Tuesday, corn spreads were down a penny to up a penny, and soybean spreads were up a quarter cent to up 5 and 3/4. CZ/CH closed a penny lower at -9, and SF/SH closed at -5 1/2, up 1/4 of a cent. CH/CK traded its highest level since April 1st today at -5 1/2. Quieter day in wheat spreads today, with the Z/H in both KC and Minneapolis trading less than penny ranges. WZ/WH closed at -10 3/4, down a penny.

Global veg oil markets were again in the headlines on Tuesday, as both soybean oil and palm oil saw higher closes despite an announcement from the Biden administration that there would be no guidance given on the 45Z renewable fuel tax credit before his exit in January. As a reminder, the credit was the main driving force behind Biden's goal to generate 3 billion gallons of SAF by 2030 by heavily incentivizing its production, and was set to take effect on January 1. The administration has said for months that details of the program would be finalized before the end of the year, but many in the industry have been skeptical of this since long before it was announced Biden would not be returning to office, and are now turning out to be correct. Going forward, President-elect Trump has vowed to dismantle Biden's Inflation Reduction Act once in office, but nobody is quite sure what this means for the biofuel industry longer-term. In the short-term, the most likely outcome is an extension of current blender tax credits that are set to expire at the end of the year, which is a move several industry executives have already begun pressing lawmakers over in an effort to offset some of the uncertainty.

The changing political landscape is causing a multitude of 'what-if' scenarios in the US ag space that are likely to drag on well into the 2024/25 crop year. What if China cancels a large amount of unshipped soybean purchases in February? What if Mexico, our biggest corn buyer, slaps retaliatory tariffs on US corn? What if Canada imposes tariffs on wheat or canola exports leaving their country for ours? What if Trump shuts off used cooking oil imports? What if he scraps Biden's bio/renewable fuel incentives all together? What if he doesn't; is the new policy similar to the Biden admin's? The list goes on. Bottom line though is that history shows question marks or unknowns in the market usually lead to increased volatility, and we would warn that this is an increasingly likely scenario in the weeks/months ahead, especially as Trump's January 20th return to the White House edges closer. Risk management will again become the name of the game for the US producer/grain merchant as we work through the winter months.

Other news of note on Tuesday, as we mentioned in our mid-day commentary, was a report that South Korean President Yoon Suk Yeol had declared martial law late on Tuesday, but parliament voted to lift the declaration within hours, labeling it "invalid". President Yeol vowed to eliminate what he labeled as "anti-state" forces, while hundreds of protestors gathered and called for his impeachment. We are unaware today of what this means politically, but do know that tensions between the North and the South have been increasing in recent months, and we also know that South Korea has been importing modest tonnages of US corn and soybeans. If anything, political tension in Korea is not friendly US ag prices.

Mid-day weather has shifted wetter in the eastern Midwest for the end of the week, as models now see the system moving up from the Gulf working its way further north than was advertised in previous runs. Heaviest rains will still be seen in/around the Delta through parts of Texas/Louisiana/Mississippi, but up to an inch is now possible through parts of AR/MO/S IL/IN/TN/KY/OH and all the way up into the northeast; this should again help boost river levels on the Mississippi, which drifted back lower in recent days. There is, however, some model disagreement on the exact path of rainfall, as the EU has rains further into MO/IL/IN than the GFS does. Otherwise, the central part of the country continues to see mostly dry conditions forecast for the rest of the week and into the weekend. Temperatures will briefly warm up on Wednesday before again chilling back off to end the week. Highs look to reach back into the 40's/50's again on Sunday, and then will likely remain on the mild side into the first part of next week. 10-15 day maps show most all of the country will see above average temps, as cold air is forced back to the north.
Forecast for South America is wetter across southern Brazil and into Paraguay over the next week following another few days of dry weather, and is wetter across most all of Argentina's growing regions in the 10-15 day period. Short-term, Argentina will continue to see just light/scattered rainfall, but concern is low due to adequate soil moisture currently. Heat remains largely absent from growing regions in both countries, with above average temps contained to just a small area in east-central Brazil. Temps across Argentina in-fact are even mostly below average over the next week-10 days.



Have a good night!

Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com ... See MoreSee Less