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Grains Report: Wheat, Rice, Corn and Oats, Soybeans, Canola and Palm Oil
By: Jack Scoville | December 23, 2024
• WHEAT
General Comments: The markets were lower in Chicago, but higher in the other markets with the best price action on Friday seen in Minneapolis. World Wheat demand has been strong with Saudi Arabia buying over 800,000 tons of optional origin Wheat as tender results were announced early this week that likely to come from Russia, Europe, and perhaps South America. There has not been much demand in world markets for US Wheat. Tensions remined high between Ukraine, the US, and Russia. The growing conditions in the US are very good. Reports of very beneficial rains for the Great Plains and Midwest and reports of steady to firm prices quoted in Russia and steady prices Argentina were around and helped keep the US market mostly steady in current ranges. Wheat farmers in the US planted the Winter crops under good conditions. Australia has seen too much rain recently that has downgraded Wheat quality, but Australia still has a very big crop to sell into world markets.
Overnight News:
Chart Analysis: Trends in Chicago are mixed to down. Support is at 528, 522, and 516 March, with resistance at 540, 550, and 554 March. Trends in Kansas City are mixed to down. Support is at 541, 535, and 528 March, with resistance at 557, 566, and 571 March. Trends in Minneapolis are mixed to down. Support is at 579, 572, and 566 March, and resistance is at 595, 602, and 606 March.
• RICE:
General Comments: Rice closed sharply lower last week on what appeared to be liquidation selling by market longs. Commercials and speculators seemed to be sellers. The trends are down on the daily charts. Generally weak Asian prices are still reported. Brazil prices remain strong and well above US prices but the difference is now less to world buyers as the Real is much lower against the US Dollar.
Overnight News:
Chart Analysis: Trends are down. Support is at 1394, 1482, and 1370 January and resistance is at 1439, 1457, and 1486 January.
• CORN AND OATS
General Comments: Corn closed higher last week on what appeared to be new buying tied to stronger weekly export sales. The export demand in recent weeks has been very strong and it seems like some of the buying is in anticipation of the new presidential regime starting here in January. President Trump has promised new tariffs on goods and services and some buyers may be making purchases now to avoid the potential for the tariff at a later date. There were no sales announcements in the daily reports from USDA in the last week. Oats were lower.
Overnight News: Unknown destinations bought 132,000 tons of US Corn.
Chart Analysis: Trends in Corn are mixed. Support is at 441, 436, and 431 March, and resistance is at 448, 452, and 458 March. Trends in Oats are mixed. Support is at 350, 348, and 339 March, and resistance is at 364, 370, and 374 March.
• SOYBEANS
General Comments: Soybeans were lower and Soybean Meal closed higher last week on the back of very strong weekly export sales reports for Soybeans. Meal was supported on spreads against Soybean Oil and posted a reversal on the weekly charts. Supplies are very large now and look to get even bigger with the coming South American harvest. Talk that President Trump wants to stop the use of bio fuels as part of his war on the green economy hurt demand ideas for Soybean Oil. The tariffs that Trump plans to impose could be a detriment to sales of all products. Brazil looks to produce much more than a year ago and some estimates range as high as 175 million tons for the country. Brazilian farmers have planted what is expected to be a very big crop in central and northern areas of the country. Warm and dry weather in the Midwest this year has hurt US production ideas due to ideas of small and very dry beans in the pods. Demand has been very strong so far this year, in part as many buyers try to get bought ahead of any new tariffs that the Trump administration might impose. Even so, supplies are very large and ending stocks projections for the USDA WASDE reports are a burden for prices.
Overnight News: China and unknown destinations each bought 132,000 tons of US Soybeans.
Analysis: Trends in Soybeans are mixed. Support is at 945, 938, and 926 January, and resistance is at 989, 1003, and 1014 January. Trends in Soybean Meal are mixed. Support is at 285.00, 278.00, and 272.00 January, and resistance is at 299.00, 304.00, and 309.00 January. Trends in Soybean Oil are down. Support is at 3880, 3780, and 3720 January, with resistance at 4100, 4200, and 4350 January.
• PALM OIL AND CANOLA
General Comments: Palm Oil was lower last week on ideas that Palm is overpriced in the world market when compared to other vegetable oils. The market closed higher today. Demand from China has not been good and demand from India has been reduced. Ideas of weaker production caused by too much rain and reports of good demand provided support. Canola was higher with Chicago. The charts show that a low has been completed but that the rally off the lows has run out for now. Prices tested the breakout area higher and held last week, so the uptrend might be starting again. The harvest is over in Canada and the crops are locked away in the bin. Producers will try to wait for higher prices before selling much, especially with the cold weather in place now.
Overnight News:
Chart Analysis: Trends in Canola are down. Support is at 584.00, 577.00, and 570.00 January, with resistance at 612.00, 618.00, and 626.00 January. Trends in Palm Oil are down. Support is at 4290, 4170, and 4070 March, with resistance at 4540, 4650, and 4770 March.
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Softs Report: Cotton, OJ, Coffee, Sugar, Cocoa
By: Jack Scoville | December 23, 2024
• COTTON
General Comments: Cotton was lower again last week and made new lows for the move and new contract lows. The trends are down. Selling has come from news that Trump will impose some big tariffs on China, but the tariffs posted were not as high as he had threatened before during the campaign. China has big problems with its domestic economy with consumer buying interest not strong and many people not working. The government has said it will take stimulus measures for the economy there next year. There are still reports of weaker demand potential against an outlook for good US production in the coming year.
Overnight News:
Chart Trends: Trends in Cotton are down. Support is at 67.50, 66.40, and 65.80 March, with resistance of 69.10, 69.90 and 70.40 March.
• FCOJ
General Comments: FCOJ closed higher yesterday and the chart trends are mixed on the daily charts and are still turning up on the weekly charts. The short term supply scenario remains very tight. The market remains well supported in the longer term based on forecasts for tight supplies in Florida. The reduced production appears to be mostly at the expense of the greening disease and some extreme weather seen in the last couple of years. There are no weather concerns to speak of for Brazil or Florida right now.
Overnight News:
Chart Trends: Trends in FCOJ are up. Support is at 521.00, 516.00, and 502.00 January, with resistance at 551.00, 556.00, and 562.00 January
• COFFEE
General Comments: New York and London closed lower last week as tight Arabica availability went against increasing availability of Robusta with the harvest of Robusta continuing and expanding in both Vietnam and Brazil. Reports of reduced offers from Brazil on weather induced short crops continue and there are also reports of too much rain in parts of Central America damaging crops there. There are reports from Brazil that producers have already sold a lot of Coffee and are holding back on selling more even with good demand. Offers from Vietnam are increasing now as the harvest has been expanding. There are reports for good rains in Brazil as the rainy season is now under way after very dry conditions.
Overnight News: The ICO average price is 298.82 ct/lb.
Chart Trends: Trends in New York are mixed. Support is at 314.00, 301.00, and 290.00 March, and resistance is at 342.00, 347.00 and 353.00 March. Trends in London are mixed. Support is at 4910, 4770, and 4630 January, with resistance at 5350, 5400, and 5550 January.
• SUGAR
General Comments: New York and London closed moderately higher on Friday on what seemed to be speculative short covering, but both markets were lower for the week. The current Brazil rains have kept the harvest and crushing pace down but could provide a boost to production for next year. Trends are down in both markets on the daily charts and on the weekly charts in both markets. Indian and Thai mills are expecting strong crops of cane. It is also wet in Brazil, and this has affected harvest progress. Supplies available to the market could be less in the next six months due to adverse growing conditions seen in Brazil during the production period. Total Brazil production has been affected by drought seen earlier in the year and the fires that destroyed crops in some areas.
Overnight News:
Chart Trends: Trends in New York are down. Support is at 1920, 1880, and 1850 March and resistance is at 2070, 2140, and 2200 March. Trends in London are down. Support is at 503.00, 495.00, and 490.00 March, with resistance at 526.00, 538.00, and 545.00 March.
• COCOA
General Comments: New York and London closed higher last week, but well off the highs on what appeared to be speculative profit taking seen later in the week. There is talk that production will be short of demand for the fourth year in a row. Chart trends are up in both markets on the daily charts. Producers in Ghana and in Ivory Coast have been fighting against too much rain that has made it hard to harvest and deliver crops. It has been very dry in West Africa lately. The trade also noted ICE-certified cocoa stocks have been rising of late, but that overall cocoa supply is set to remain sharply constrained for several seasons due to structural problems in Ivory Coast and Ghana.
Overnight News:
Chart Trends: Trends in New York are up. Support is at 10660, 10250, and 9790 March, with resistance at 13000, 13600, and 14200 March. Trends in London are up. Support is at 9100, 8960, and 8500 March, with resistance at 10200, 10500, and 10700 March.
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The Corn & Ethanol Report
By: Daniel Flynn | December 23, 2024
We kickoff the day with Chicago Fed National Activity Index at 7:30 A.M., CB Consumer Confidence, 3-Month & 6-Month Bill Auction at 9:00 A.M., NY Fed Treasury Purchases 0 to 1 yrs. at 9:30 A.M., Export Inspections at 10:00 A.M., 42-Day & 52-Week Bill Auction at 10:30 A.M., and 2-Year Note Auction at 12:00 P.M.
The Fed’s preferred inflation indicator, The Personal Consumption Expenditure Index, diverged from the Consumer Price Index in November, The PCE index rose o.13% from October vs. CPI, down 0.5%. This marked the 6th consecutive month higher, the index has risen 54 of the last 55 months. The annualized inflation rate rose for the 2nd consecutive month to a 4-month high of 2.4%, and the PCE index set a record high of 1.248, Personal Income rose by 0.3% from October, the smallest increase in 3 months, following an upwardly revised 0.7% in October. Personal Spending increased by o.4% to an annualized rate of $20.2 trillion. The personal savings rate declined to 4.4%, down from 4.5% in October and 4.6% last year.
South American Weather Pattern Discussion
Argentine Forecast Trends Drier Next 10 days; Rains Return After Dec 31st-Crop Threat Minimal Nearby:
ENSO (La Nina) is weak across the equatorial Pacific, with Friday’s Reading already pushing back near neutral. Just 8-days ago, ENSO shifted to a weak La Nina, but ocean temps leave already started to warm. La Nina conditions could return by early January. The point is that a La Nina is not controlling the South American climate, and its impact on Argentine and Brazilian weather will be muted over the next 4-6 weeks. This is not to suggest that a trend below-normal rainfall will not last across Argentina, but a full-blown drought is not expected, There has been a recent modest warming trend. La Nina was forecast to develop in July but was delayed due to persistently warm Pacific Ocean temperatures . Typically, it requires La Nina or El Nino to be in place for 4-6 weeks before its signature impacts the climate. The current dry spate of weather in Argentina is not due to La Nina, and the forecast models could be too dry. The model has under forecast Argentine rainfall since October.
Ag Resources Global Weather Pattern Discussion
The forecast models end La Nina in February/March with neutral conditions heading into the Northern Hemisphere spring. Two of the ENSO models forecast El Nino by July, but here, too, these forecasts are outliers, with neutral conditions being the best bet. This implies a lack of strong ENSO correlation for Central US weather during the 2025 growing season. A near-normal Midwest/Plains growing season is forecast. The forecast risk is that El Nino returns by late summer or autumn due to the record-warm Pacific Ocean. This would lead to a second favorable US growing season.
Ag Resources sees no weakening of the Brazilian monsoon next 2-3 weeks; implying that the Brazilian soybean crop will be well watered:
Several chances for showers exist for Argentina over the next 10 days still, due to the past 3 weeks of drier-than-normal conditions, the exact rainfall location and totals will be closely followed. No extreme heat has harmed Argentine crops to date, but a few days of heat will develop in early 2025,
Ag Resources Corn Comments & Analysis
CBOT Corn Rallies on Dry Argentine Weather Forecast/Chart Based Short Covering; March CBOT to Test $4.48-$4.52Resistance:
March CBOT corn pushed higher Friday, with a short-covering rally in soybeans/soybean meal adding support. Columbia has recently been a buyer of US corn, with Foreign Agricultural Services (FAS) announcing another sale of 150,000 MT’s . The US corn export profile is slowing, with Argentine fob offers below US Gulf. China’s demand for world corn is lacking, with WASDE having cut its China import estimate to 14 MMT,s down 9 MMT’s from last year. China’s been largely absent as a world corn buyer since March. As China’s cash corn market scores a fresh five-year low, it’s doubtful that China will import more than 8 MMT’s in 2024/25. Mexico will easily become corn importer crown at 24 MMT’s. China’s corn market has been dropping while the US futures market has been rising. The Chinese corn import margin is at it’s lowest level since December 2022. This does not bode well for CBOT corn prices without dire South American drought,
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US Dollar Reprieve Sparks Grains Spike. The Corn & Ethanol Report
By: Daniel Flynn | December 20, 2024
We kickoff the day with Core PCE Prices MoM & YoY, Personal Income MoM , Personal Spending MoM, PCE Price Inex MoM & YoY at 7:30 A.M., Michigan Consumer Sentiment Final, Michigan 5-Year Inflation Expectations Final, Michigan Consumer Expectations Final, Michigan Current Conditions Final, and Michigan Inflation Expectations at 9:00 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., and Cattle on Feed at 2:00 P.M.
The Bureau of Economic Analysis 3rd estimate for Q3 GDP showed that the US economy grew by 3.1% during the quarter up from 2.8% in the previous estimate. This beat the 3% growth in the 2nd quarter and 1.6% in the 1st quarter. Personal spending increased fastest since Q 1 2023, rising to 3.7 vs. the previous estimate of 3.5%. Consumption of goods rose by 5.6%, and spending on services increased by 2.1%, and investment in equipment jumped by 10.8%. Government consumption rose by 5%, and net trade was less negative than in the previous estimate. Nominal GDP rose $358 Bil from the last quarter to $29.3 trillion. However, the cost of this economic growth was an additional $633 Bil of federal debt. Which rose to a record $36 Trillion. From 1960-1980, every dollar of federal debt added $3 to GDP. Since 2008, the Federal debt has grown significantly faster than GDP.
CBOT Corn Recovers at Chart Support; Rallies Struggle as Export Demand Cools and Ethanol Margins are Red:
March CBOT corn bounced at it’s 20-day moving average amid weakness in the US dollar and a recovery in the Brazilian real.US supply risks center on USDA’s final yield on Jan 10th , but Ag Resources (ARC) uses retests of $4.50 to catch up on cash sales. It’s difficult to bullish of corn without prolonged heat/dryness in Argentina and S Brazill. The US’s dominance of world corn trade is beginning to fade. US corn export sales in the week ending Dec 12th totaled 46 Mil Bu, vs. 37 Mil the previous week but near unchanged from mid-December a year ago. Beginning in Feb, importers will begin to cover forward needs with South American origin. Sales stay in a range of 35-55 Mil Bu through winter, but additional non-US supply dislocation is needed to pull 24/25 US end stocks below 1.7 Bil Bu. Additionally, ARC’s long term work features a loosening of global supply & demand as more land is available to seed corn in the US in spring as a repeat of crippling Black Sea drought unlikely. Near-term strength must be sold. Resistance sits at $4.454-$4.50 March CBOT, and $4.40-$4.45 basis December.
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Orange Juice soars to a new all-time high
By: Barchart | December 19, 2024
• $SPX seemingly range bound between 0.75 and 1.0 std dev. Waiting to see signs of direction.
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Natural Gas Breakout Signals Bullish Momentum Toward Higher Targets
By: Bruce Powers | December 19, 2024
• Natural gas signals a bullish continuation with a breakout 3.56, targeting Fibonacci resistance at 3.85 and 4.06 if today’s close confirms the move.
Natural gas triggered a trend continuation signal on Thursday as it broke out to a new trend high of 3.59. It continues to trade near the highs of the day at the time of this writing and may hit a new high before the day’s close. Therefore, there is a chance for confirmation of the breakout with a daily close above the prior trend high of 3.56.
Recently, natural gas established that the near-term remains in place as it successfully tested support around the 20-Day MA and established a higher swing low at 3.09. Today’s close will likely retain strength by ending in the top third of the day’s trading range.
First Pullback Following Breakout is Complete
The first pullback following the breakout of a large symmetrical triangle pattern completed at the December 4 swing low of 2.98. That was around the triangle breakout area of 3.02 and it sets the stage for a bullish continuation as prior resistance was tested as support. Today’s breakout occurred two days following a reversal day established on Tuesday, which also generated a higher swing low.
Support at Today’s Low of 3.39
Near-term support is at today’s low of 3.39. A decline below that price could lead to another retest of support around the 20-Day MA, currently at 3.27. As noted previously, the 20-Day line was successfully tested as support on several days recently. Support was indicated by the daily closes above the line, even though earlier the price of natural gas had traded below the 20-Day line. Of course, a key support area is the interim swing low from Tuesday at 3.09 because it generated a higher swing low and holds the second point of a rising trendline.
First 3.64, then 385
A daily close above 3.56 will confirm today’s breakout. There could be a clear pickup in momentum that takes natural gas straight to test resistance around the top of the triangle pattern at 3.64. But given strength indicated following the symmetrical triangle breakout, that price level is expected to be exceeded. Notice that following the November 20 breakout, natural gas quickly took out prior swing highs at 3.16 and 3.09.
That was a sign of strength that should return once the 3.56 high is exceeded. Initial higher targets would then be anchored around a 38.2% Fibonacci retracement level at 3.85. Higher up is an extended target from a rising ABCD pattern (purple) at 4.06, followed by an initial target from a smaller ascending ABCD pattern (red) at 4.33.
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Orange Juice doesn't care what Powell has to say! Just hit its highest closing price in history
By: Barchart | December 18, 2024
• Orange Juice doesn't care what Powell has to say! Just hit its highest closing price in history.
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Commodities Daily Market Movers (% Price Change)
By: Marty Armstrong | December 19, 2024
• Top Movers
Cocoa (NYCSCE) Futures 6.8 %
Lumber (CME) Futures 3.43 %
London IPE Gas Oil Futures 2.6 %
Coffee (NYCSCE) Futures 2.37 %
Orange Juice (NYCE) Futures 2.12 %
• Bottom Movers
Kuala Lumpor Palm Oil Crude Futures 4.15 %
Soybeans Futures (CBOT) 2.56 %
Soybean Meal CBT Futures 2.55 %
Soybean Oil CBT Futures 2.49 %
US - Dow / Gold Ratio 2.27 %
*Close from the last completed Daily
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Softs Report: Cotton, OJ, Coffee, Sugar, Cocoa
By: Jack Scoville | December 18, 2024
• COTTON
General Comments: Cotton was a little lower again yesterday and the trends are still turning down. Selling has come from news that Trump will impose some big tariffs on China, but the tariffs posted were not as high as he had threatened before during the campaign. China has big problems with its domestic economy with consumer buying interest not strong and many people not working. The government has said it will take stimulus measures for the economy there next year. There are still reports of weaker demand potential against an outlook for good US production in the coming year.
Overnight News:
Chart Trends: Trends in Cotton are mixed to down. Support is at 68.40, 67.90, and 66.40 March, with resistance of 71.20, 71.90 and 72.40 March.
• FCOJ
General Comments: FCOJ closed mostly a little higher yesterday and the chart trends are up on the daily charts and are turning up on the weekly charts. USDA estimated all Oranges production at 2.48 million tons for the US and 12 million boxes. The estimates are down a lot from early forecasts and from the previous year. The short term supply scenario remains very tight. The market remains well supported in the longer term based on forecasts for tight supplies in Florida. The reduced production appears to be mostly at the expense of the greening disease and some extreme weather seen in the last couple of years. There are no weather concerns to speak of for Brazil or Florida right now. Nielsen said that November retail Orange Juice sales were 24.68 million gallons, up about 3.0 million gallons from October.
Overnight News:
Chart Trends: Trends in FCOJ are up. Support is at 516.00, 505.00, and 484.00 January, with resistance at 544.00, 550.00, and 556.00 January
• COFFEE
General Comments: New York and London closed mixed to lower yesterday but recovered from the lows set early in the session to close much above those lows. There were reports that a large trade house has pegged top producer Brazil’s coming crop at 40 million bags in the last week, in contrast to Volcafe, which cut its Brazil arabica forecast by 11 million bags to 34.4 million. Reports of reduced offers from Brazil on weather induced short crops continue and there are also reports of too much rain in parts of Central America damaging crops there. There are reports from Brazil that producers have already sold a lot of Coffee and are holding back on selling more even with good demand. Offers from Vietnam are increasing now as the harvest has been expanding. The chart trends are still up in both markets. There are reports for good rains in Brazil as the rainy season is now under way after very dry conditions.
Overnight News: The ICO average price is 307.76 ct/lb.
Chart Trends: Trends in New York are mixed to up. Support is at 314.00, 301.00, and 290.00 March, and resistance is at 330.00, 335.00 and 347.00 March. Trends in London are mixed to up. Support is at 5060, 4910, and 4770 January, with resistance at 5350, 5400, and 5550 January.
• SUGAR
General Comments: New York and London closed lower yesterday. UNICA said that the second half of November crush was down 15% from the previous year at 20.4 million tons. Sugar production was 1.1 million tons, down 23%, and ethanol production was 1.2 billion liters, down 5%. Both markets are moving lower on the charts. The current Brazil rains have kept the harvest and crushing pace down but could provide a boost to production for next year. Trends are down in both markets on the daily charts and on the weekly charts in both markets. Indian and Thai mills are expecting strong crops of cane. It is also wet in Brazil, and this has affected harvest progress. Supplies available to the market could be less in the next six months due to adverse growing conditions seen in Brazil during the production period. Total Brazil production has been affected by drought seen earlier in the year and the fires that destroyed crops in some areas.
Overnight News:
Chart Trends: Trends in New York are mixed. Support is at 2020, 1980, and 1920 March and resistance is at 2140, 2200, and 2240 March. Trends in London are mixed to down. Support is at 524.00, 513.00, and 504.00 March, with resistance at 545.00, 551.00, and 564.00 March.
• COCOA
General Comments: New York and London closed higher and at new highs for the move on weather and production related buying. There is talk that production will be short of demand for the fourth year in a row. Chart trends are up in both markets on the daily charts. Producers in Ghana and in Ivory Coast have been fighting against too much rain that has made it hard to harvest and deliver crops. It has been very dry in West Africa lately. The trade also noted ICE-certified cocoa stocks have been rising of late, but that overall cocoa supply is set to remain sharply constrained for several seasons due to structural problems in Ivory Coast and Ghana. Ivory Coast’s cocoa grind fell 9.9% year on year in October but rose 16.1% in November.
Overnight News:
Chart Trends: Trends in New York are up. Support is at 10660, 10250, and 10000 March, with resistance at 12000, 12120, and 12240 March. Trends in London are up. Support is at 8160, 7890, and 7640 March, with resistance at 9460, 9580, and 9700 March.
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Grains Report: Wheat, Rice, Corn and Oats, Soybeans, Canola and Palm Oil
By: Jack Scoville | December 18, 2024
• WHEAT
General Comments: The markets were a little lower in all three markets. USDA showed poor export demand in the weekly reports. World Wheat demand was strong with Saudi Arabia buying over 800,000 tons of optional origin Whet that s likely to come from Russia, Europe, and perhaps South America. Tensions remined high between Ukraine, the US, and Russia. The growing conditions in the US are very good. Reports of very beneficial rains for the Great Plains and Midwest and reports of steady to firm prices quoted in Russia and steady prices Argentina were around and helped keep the US market mostly steady in current ranges. Wheat farmers in the US planted the Winter crops under good conditions. Australia has seen too much rain recently that has downgraded Wheat quality, but Australia still has a very big crop to sell into world markets.
Overnight News:
Chart Analysis: Trends in Chicago are mixed to down. Support is at 543, 540, and 534 March, with resistance at 560, 571, and 577 March. Trends in Kansas City are mixed to down. Support is at 551, 544, and 535 March, with resistance at 577, 591, and 597 March. Trends in Minneapolis are mixed. Support is at 593, 586, and 585 March, and resistance is at 613, 625, and 634 March.
• RICE:
General Comments: Rice closed near unchanged again yesterday after trading both sides of unchanged, and the holiday market seems to be underway. The trends are still mixed on the weekly charts but are turning down on the daily charts. Generally weak Asian prices are still reported. Brazil prices remain strong and well above US prices.
Overnight News:
Chart Analysis: Trends are mixed. Support is at 1486, 1481, and 1457 January and resistance is at 1538, 1544, and 1558 January.
• CORN AND OATS
General Comments: Corn closed a little lower yesterday in mostly quiet trading. The US export demand was a little less last week in the weekly reports. The export demand in recent weeks has been very strong and it seems like some of the buying is in anticipation of the new presidential regime starting here in January. President Trump has promised new tariffs on goods and services and some buyers may be making purchases now to avoid the potential for the tariff at a later date. There were no sales announcements in the daily reports from USDA in the last week. Oats were a little lower.
Overnight News: Colombia bought 135,000 tons of US Cor
Chart Analysis: Trends in Corn are mixed to up. Support is at 436, 431, and 428 March, and resistance is at 448, 452, and 455 March. Trends in Oats are mixed to up. Support is at 350, 348, and 339 March, and resistance is at 370, 374, and 376 March.
• SOYBEANS
General Comments: Soybeans and Soybean Oil closed lower and Soybean Meal was a little higher again yesterday on talk that President Trump wants to stop the use of bio fuels as part of his war on the green economy. The tariffs that Trump plans to impose could be a detriment to sales of all products. Brazil looks to produce much more than a year ago and some estimates range as high as 175 million tons for the country. Brazilian farmers have planted what is expected to be a very big crop in central and northern areas of the country. Warm and dry weather in the Midwest this year has hurt US production ideas due to ideas of small and very dry beans in the pods. Demand has been very strong so far this year, in part as many buyers try to get bought ahead of any new tariffs that the Trump administration might impose. Even so, supplies are very large and ending stocks projections for the USDA WASDE reports are a burden for prices.
Overnight News: Colombia bought 120,000 tons of US Soybean Meal.
Analysis: Trends in Soybeans are mixed to down. Support is at 968, 962, and 950 January, and resistance is at 989, 1003, and 1014 January. Trends in Soybean Meal are mixed. Support is at 284.00, 281.00, and 278.00 January, and resistance is at 294.00, 299.00, and 304.00 January. Trends in Soybean Oil are mixed. Support is at 3960, 3880, and 3780 January, with resistance at 4200, 4350, and 4450 January.
• PALM OIL AND CANOLA
General Comments: Palm Oil was lower yesterday on continued Soybean Oil weakness. Demand from China has not been good, but demand from India has been seasonally strong. Ideas of weaker production caused by too much rain and reports of good demand provided support. Canola was lower with Chicago. The charts show that a low has been completed but that the rally off the lows has run out for now. The harvest is over in Canada and the crops are locked away in the bin. Producers will try to wait for higher prices before selling much, especially with the cold weather in place now.
Overnight News:
Chart Analysis: Trends in Canola are up. Support is at 585.00, 577.00, and 570.00 January, with resistance at 607.00, 618.00, and 626.00 January. Trends in Palm Oil are mixed to down. Support is at 4640, 4540, and 4470 March, with resistance at 4840, 4930, and 5020 March.
Midwest Weather Forecast Scattered rain and snow showers. Temperatures should average near normal.
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The Corn & Ethanol Report
By: Daniel Flynn | December 18, 2024
We kickoff the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., Building Permits Prel, Building Permits MoM Prel, Current Account, Housing Starts, and Housing Starts MoM at 7:30 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction at 10:30 A.M., Fed Interest Rate Decision at 1:00 P.M., Fed Press Conference at 1:30 P.M.,, and Dairy Products Sales at 2:00 P.M.
The Fed is expected to make its last cut in a while at ¼ of a point on interest rates. Also on Tuesday, the Federal Reserve reported that US industrial production in November remained stagnant. Production shrank by o.1% from November, marking the 3rd consecutive month lower. This aligned with other surveys that showed that the US manufacturing industry continues to struggle. Compared to a year ago, industrial production was down 0.90%, marking the 25th consecutive month that production changed (up or down) by less than 2%. Manufacturing production, which accounts for 80% of industrial production, was down 1% from a year ago to mark the 5th consecutive month of annualized declines. Capacity Utilization declined 76.8%, the lowest since April 2021 and 2% below the long-term average. At the same time, the Census Bureau reported retail sales rose for the third consecutive month. However, Business Inventories rose for the 7th consecutive month.
South American Weather Pattern Discussion
Argentine Soil Moisture Adequate to Abundant; Brazilian Monsoon Stays Active Next 2-4 Weeks:
The South American forecast is consistent with prior runs and prolonged heat/dryness remains absent into the latter part of December. Infact, a pattern of above normal rainfall is most probable across Paraguay and Brazil into mid-winter. Recent unexpected but abundant rainfall has allowed subsoil moisture to be fully replenished in all but La Pampa and the fringe producing areas in the far north of the country. The north central has water needs with current soil moisture. Otherwise, moisture is adequate across the core of Argentina’s Ag Belt., and is currently abundant in pockets of Buenos Aires. The 10-day forecast maintains near daily rain chances across Brazil & Paraguay, while regionally heavy rainfall of 1-3” impacts Cordoba and much of northern Argentina – where it will be most welcomed – Dec 18-20. All but SW Argentina will be well watered by the late month. The strong correlation between December Rainfall and corn yield performance in Argentina is due to some 25-35% of the crop there being planted in Oct & early Nov on average. Additionally, early planted fields yield better than later planted ones. This year40% of the crop was planted prior to Nov 15th, and so Dec/very early Jan weather is even more important. Rainfall of 11” or more favors trend/above yields. Rainfall of less than 9” in the period nearly guarantees yield loss. Assuming two-week forecasts verify, most probably Argentine corn yield in 24/25 will beat to 5% above trend. A wetter than normal January raises yield to 5-19% above trend, at which point Argentina’s corn production reach 52-53 MMT’s, vs. 50 last year and USDA’s projected 51. USDA’s balance sheet and ARC agrees, total Argentine corn supply will be 55 MMT’s vs. 52 last year. Exports from March 2025 to Feb 2026 will total 36 MMT’s, vs. an estimated 33 MMT’s in the current year and the largest since 2020. The Argentine cash market bottomed at much higher than anticipated prices in June – which in turn funneled sizable demand to the US thereafter – but ARC expects the market has also scored an earlier than normal seasonal top. Spot fob premiums in Argentina tend to begin the process of weakening in Jan-Feb, and then collapse once Argentine harvest reaches 30% complete. ARC expected Argentina’s corn harvest to reach 30% complete this season on April 20th vs. May 12th a year ago. The US has dominated world corn trade since summer 2024, but clients must be prepared for another reshuffling of trade flows beginning in spring 2025. Assuming the Brazilian wet season is extended into April, combined South American corn production in calendar year 2025 will be up 240 Mil Bu year-over-year. Much of that increased supply will be pushed in the global market between April and August.
Corn Comment Analysis
CBOT Corn Does Little; Tight Exporter Stocks Balanced Against Global Demand Contraction:
CBOT corn remains stuck between $4.30 and $4.50, and new input is being sought. ARC does note USDA pegs exporter corn stocks/use in 24/25 at just 8.3%, vs. 9.5% in 23/24 and the 4th lowest on record. ARC doubts chart support at $4.30-$4.35 is broken until USDA’s final yield and Dec 1st stocks data released in early January. However, ARC’s fear remains centered on a loosening of USDA’s balance sheet amid anemic Chinese imports and enlarged South American production . Spot Dalian corn in China has fallen to a newer 4.5 month low at $2.90/MT. This compares to $3.40/MT a year ago, and break in Chinese value continues to despite a near complete lack of imports. Chinese corn supplies are adequate/abundant relative to current consumption. ARC fears final 24/25 Chinese imports drop to 8-10MMT’s, 4-6MMT’s below last year. China and a weak Brazilian currency 9real) are concerns. Urgency is securing US corn wanes after winter. Rallies will continue to be sold at $4.50+ as it is viewed overvalued.
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Lumber's 10-day losing streak has come to an end! This was its longest losing streak since March/April
By: Barchart | December 17, 2024
• Lumber's 10-day losing streak has come to an end! This was its longest losing streak since March/April.
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Cocoa hits another all-time high! We just can't catch a break here
By: Barchart | December 17, 2024
• Cocoa hits another all-time high! We just can't catch a break here.
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Crude Oil Pullback Sets Stage for Potential Upside Continuation
By: Bruce Powers | December 17, 2024
• After a pullback to the 20-Day MA, crude oil shows bullish signals but must overcome resistance near $73.27 to confirm strength.
Crude oil triggered an initial breakout of consolidation last week, reaching an interim swing high of 71.41 before pulling back. Subsequently, Tuesday led to a deeper bearish pullback and a test of support around the 20-Day MA with the day’s low of 69.22. The drop to the 20-Day line took crude back below the downtrend line (purple) that marks the top of consolidation.
However, at the time of this writing it looks like there is a good chance today’s close will be above the line. That would indicate that it now represents support, which would be bullish. Nonetheless, further signs of strength are needed to continue to support that thesis.
Finds Support at 20-Day Line
Notice that today’s pullback to the 20-Day line was the first test of a previous resistance area since last week’s bullish breakout. The 20-Day line was reclaimed on the same day the consolidation breakout triggered. Since a new lower swing high has been generated as of today, that high at 69.98 can be watched as a potential pivot.
A little further up is a more significant upswing high at 71.79. If crude can get above and stay above that price level, higher prices become more likely. Previous resistance shows around the 70.19 to 73.27 highs, which corresponds to the 50% retracement at 72.97.
Consolidation Breakout Could Trigger Momentum Spike
However, since a breakout of consolidation triggered there is the potential for a more aggressive move higher given the compression of the price range over recent months. In that case the 61.8% Fibonacci retracement is at 74.42 followed the 78.6% retracement at 76.47.
Also, notice that the lower boundary line of a large symmetrical triangle pattern cuts through the area between the two price levels. It also represents potential resistance. It will be interesting to see how crude oil relates to the line given that it represents the triangle.
Downward Pressure Remains
Overall, crude remains in a downtrend. The more significant swing low of the price structure of the trend is at the swing high of 73.27 from early-October. If that price level is exceeded, then a bullish long-term reversal is indicated and an upside breakout through the triangle would have also been triggered. Regardless of current technical indications, patterns evolve or fail if they don’t follow through on the initial distinction.
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