We kicked off the day with Fed Cook Speech at 8:15 A.M., S&P Global Composite PMI Final and S&P Global Services PMI at 8:45 A.M., Factory Orders and Factory Orders ex Transportation at 9:00 A.M., NY Fed Treasury Purchases 6 to 10 yrs. at 9:30 A.M., Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., 3-Year Note Auction at 12:00 P.M., and Total Vehicle sales.The ISM Manufacturing PMI rose by 0.9 points from the previous to 49.3 in December of 2024, ahead of market expectations of 48.4. The result reflected the softest pace of contraction in the US manufacturing sector since the 50.3 recorded in March, which was the sole period of expansion in the industry since September 2022. The guage measuring new orders was at 52.5, reflecting the strongest level for demand for new goods in 11 months, suggesting that lower output for manufacturers may be close to bottoming despite the prolonged period of restrictive interest rates by the Fed. Consequently, production expanded (50.3) for the first time in six months. In turn, the gauge measuring prices forced by firms rose to 52.5, ahead of market expectations of 51.7, to maintain concerns of stubborn inflation. Firms noted a pickup in supplier deliveries and investments to undercut potential tariffs from the incoming Trump administration.
Long Range EU/AI/Canadian Ensemble Models Argue That area of Argentine Dryness to Shrink after January 14th:The ensemble forecast models indicate the Argentine dryness will shrink following mid-January with the forecast calling for rain across southern and western provinces. This would help 30-40% off all Argentine crop area, but a widespread drought is becoming less likely. Graphics have reflected the rainfall forecast of the often more correct EU Ensemble model through January 18th . Buenos Aires and Cordoba are forecast to receive crop-stabilizing rainfall. Note that Argentine corn/soybean seeding is in its last stages and will finished by January 20th . Crops with poor stands can be replanted without yield loss if needed. Improvement in Argy weather is forecast beyond January 14th . Also, notice the abundance of Brazilian rainfall and that its soybean/initial corn crop has not suffered heat/drought stress. A test of Brazilian soybean seed genetics should produce record yields and potentially a country yield that exeeds 5% of the trend of a Brazilian soybean crop of 177-179 MMT’s.
Ag Resources (ARC) Market DiscussionIn another 2 weeks, the vessel lineup for Brazilian soybean exports will explode upwards as Northern Brazilian harvest starts in earnest. There has been some sporadic harvest of September – planted fields. Still, the bulk of Mato Grosso farmers waited until early October – and the arrival of seasonal rains – to strongly advance soybean seeding. Brazilian farmers seed a soybean plant that matures in 101-106 days. This implies that from January 20 to February 5th, the Northern Brazilian and Parana harvest will accelerate and score substantial progress. The flow of soybeans to Brazilian soybean loadings reached their zenith in March/April 2021-2022 with nearly 18 MMT’s of soybeans exported. However, due to China’s negative crush margins and poor post-Lunar New Year feed demand, this record is expected not to be reached – even with Brazil harvesting a soybean crop that could be 17-20 MMT’s larger. A long tail of Brazilian soybean export demand.
CBOT Corn Declines on Large Spec Long Position; Worry over China Corn Imports:CBOT corn futures settled sharply lower to end the week, with spot CBOT futures forming a bearish hook reversal down on the weekly chart. Last week’s low at $492 ¼ was tested but not exceeded corn futures look to have scored a seasonal high (like last year), but that will depend on January’s NASS corn ear weights and Q1 US corn deed/residual usage. The CFTC will release its Commitment of Traders report this afternoon following the New Years Eve holiday. ARC estimates that managed monet is net long more than 190,000 contracts of corn futures through Tuesday. A poetion of Market length is vulnerable to liquidation through before Friday’s USDA January Crop Report.More By This Author:End Of The Run For Upside 2025 Grain Prices? The Corn And Ethanol Report
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