TFM Morning Update 01-07-2025

CORN

Corn is trading lower this morning after yesterday’s move higher took out the previous day’s high. The rally was mostly driven by a slightly drier Argentinian forecast, but there are now better chances for rain.
Natural gas, an important input in synthetic nitrogen production, may become more expensive over the next few weeks as an arctic air blast hits the US this week followed by a cold plunge for Europe in late January.
Yesterday’s CFTC report showed funds buying back a whopping 67,859 contracts of corn as of December 31 which has left them with a net long position of 228,806 contracts.

Soybeans are trading lower this morning and so far have taken back all of yesterday’s gains that were driven by Argentinian weather concerns. Soybean meal is trading lower while soybean oil is higher.
Indonesia has just been admitted as a full member of the BRICS bloc of developing countries with Brazil presiding. This is significant to soybeans because Indonesia is the top producer of palm oil in the world.
Yesterday’s CFTC report showed funds as buyers of soybeans as of December 31. The bought back 25,436 contracts which decreased their net short position to 42,447 contracts.

Wheat is mixed to start the day with Chicago trading slightly lower, KC higher, and Minneapolis is higher as well. Yesterday, futures rallied off of contract lows in tandem with the rest of the grain market.
Condition ratings for winter wheat declined during December in Kansas and Oklahoma according to the USDA despite a slight improvement in the dry conditions. The last wheat ratings saw 55% of the crop rated good to excellent which was the best rating for that time of year in 6 years, but conditions declined.
Yesterday’s CFTC report saw funds as net buyers of wheat as of December 31. They bought back 8,247 contracts of Chicago wheat and 1,075 contracts of KC wheat. This left them net short 86,762 contracts of Chicago and short 33,861 contracts of KC.

Amanda Brill