We kicked off the day with Export Sales, Goods Trade Balance Adv., Retail Inventories Ex Autos MoM Adv., and Wholesale Inventories MoM Adv. At 7:30 A.M., EIA Natural Gas Storage at 9:30 A.M., and Baker Hughes Oil & Total Rig Count at 12:00 P.M.The Federal Reserve reported that the US M2 money supply increased by $21,448 billion in November, a 0.6% increase for the month, but it was the largest 1-month increase since December 2021 (35 months) compared to a year ago, M2 was 3.73% larger, the largest year-over-year increase since August 2022 (27 months). Compared to February 2020 (pe-pandemic), M2 has increased by %5.994 billion, a 39% increase. The current supply of money is 2.3% under the record high that was set in April 2022. In the last 4 years, there have been 4 major spending bills passed, totaling more than $1.6 trillion. It’s estimated that only about a half of that money has been spent, meaning there will be a significant increase in the US money supply in the coming months/years.Dec 1 US Corn Stocks Estimate as of Dec 26th 4:30 P.M.:Dec 1 US corn stocks as a percent of Sep-Nov consumption is calculated at 259%, down slightly year-over-year but aligned with the 10-year average. Sep-Nov industrial disappearance is estimated at 2,500 Mil Bu, a three year high but which is aligned with USDA’s annual forecast of 5,825 Mil. Sep-Nov export disappearance is estimated at 501 Mil Bu, up 125 Mil year-over-year, the largest since 2028 and the third largest on record. Ag Resources (ARC) views the US (and world) corn market as neither tight nor overburdened with supply. Notice Dec 1 corn stocks/use in 2015-2017 – when the market was confined to a range of $3.30-$4.00 – was routinely 270% or greater. Theres no need for sub $3.80 corn today, but nor is a need for $4.50+ without meaningful South American supply loss. For now, the enlarged US disappearance has balanced record yields and near record total supply. The addition or subtraction of another 200-300 Mil Bu of US corn end stocks is needed to shake the CBOT market out of a range of $4.10-$4.50. The correlation between Dec 1 US stocks/use and March CBOT ‘s average price during January and today is adequately aligned with US supply & demand and lingering in the backround is near ideal South American weather. ARC notes September-November disappearance is always the largest of the crop year. ARC’s bet is that Dec-Feb demand also matches a year ago levels, but thereafter the need to clear large South American inventories via larger export acts as a weight. Additionally, US ethanol exports are projected to wane on faltering energy values. ARC sees rallies $4.50+ as a place to move along old and new crop sales. In yesterday’s trading session March corn settled at 453 ¾ which has also traded above the 200-day moving average. Strong demand at the moment for US corn and drier Argentina forecast helped trigger new buying. Keep in mind Argentina’s sub-soil moisture is adequate and the drier weather Argentina is realizing is still too early to push the panic buy button. Some could see USDA lowering US corn carryout in the January report. Weekly US export sales have been delayed to this morning. Trade looks for export sales at 1.000-1.650 MT vs. 1.174 last week. Livestock futures are mixed as trade is expected to be slow following the Christmas holiday. Feeder cattle futures remain discounted to the cash index. Some see a more bullish outlook in early 2025 for cattle. Lean hogs, however, are down 0.6% to 8387.More By This Author:March Corn At Resistance Still Time To Buy Mar & May Puts. The Corn & Ethanol Report
$4.50 Resistance Should Fail – Buy March & May Corn Puts. The Corn & Ethanol Report
Argentine Weather Plus Chart Based Short-Covering Led to Friday’s Rally. The Corn & Ethanol Report
