We kicked off the day with Redbook YoY at 7:55 A.M., JOLT’s Job Openings and JOLT’s Job Quits at 9:00 A.M., RCM/TIPP Economic Optimism Index at 9:10 A.M., 42-Day Bill Auction at 10:30 A.M., Fed Kugler Speech at 11:35 A.m., Fed Goolsbee Speech at 2:45 P.M., API Energy Stocks and LMI Logistics Managers Index at 3:30 P.M.The Institute for Supply Management’s monthly Manufacturing Purchasing Manager’s Index rose to 48.5 in November, up from 46.5 in October and the highest since June. The index was up 4% for the month to mark the largest annualized increase since June. Despite these improvements, the index still reflected contraction in the US manufacturing industry. The index has been below 50 in 24 of the last 25 months, which is the longest period of manufacturing contraction since 1989-1991 when the index was also below 50 in 24 of the last 25 months. If the December index measurement is below 50, the current cycle would set a record for the number of months of contraction in the US manufacturing index. It’s also the largest period that the index has been below 50 without the Fed declaring an “official” recession.
South American Weather UpdateDrier Pattern in Argentina Next Two Weeks; Crop Threats Lacking Amid Absence of Heat:South America’s climate pattern remains favorable amid recent widespread rainfall in Argentina, a needed southward expansion in Brazilian rainfall and as the monsoon at northern Brazilian latitudes continue to perform normally. Nearly all of South American producing regions are well watered. There will be a need for the return of regular rainfall in Argentina in the second half of December, but trend/above trendyields remain intact. Key is that heat will be absent into mid-month. Temperatures in Argentina will be capped in the low 80’s, which along with dryness into Dec 12th speeds along soybean seeding. Rainfall of 3-6” blankets all of Brazil and Paraguay, with totals of 4-6” to favor the drier areas of far southern Brazil.
CBOT Corn Ends Plat Post-Holiday; US Market Competitive but Chinese Market Collapse Continues:In yesterday’s action the December corn shed 3,007 contracts of open interest leaving 9,402 contracts left to be liquidated or delivered before December 13th expiration. March CBOT corn ended firm but was unable to break through its 20-day moving average at $4.36. Both the bulls and the bears continue to struggle for leverage, and while this battle is expected to continue through December. AG Resources (ARC’s) longer term concern is one of building global surpluses. US Gulf origin is again highly competitive in the world market, but nearby strength must be used to leverage forward sales. An anemic Chinese economy & favorable South American weather will dominate price discovery in 2025. Spot Dalian corn in China on Monday settled at $2.96/MT ($7.51/Bu) a newer 4-year low. China’s spot market has fallen from $11.60 to $7.50 in two years and remains weak despite the near complete absence of imports this season. ARC also doubts China returns to the import market in bulk until summer. Note also Chinese stimulus/low interest rates have failed to spark economic growth. UD disappearance stays rather large until late winter/spring, but the risk there after is on of sub-$4.00 futures $4.40-$4.45, March and December, are targeted to move along hedges.More By This Author:Many Reports on Our Plate Today – Before We Fill It Tomorrow. The Corn & Ethanol Report
Tariffs Are Not All Bearish. The Corn & Ethanol Report
Corn/Wheat FOB Prices- Black Seas Tensions & South American Weather. The Corn & Ethanol Report
