Closing Markets: Corn: +4.50.
Beans: +32.75. Wheat: +17.
Good evening!
Market Recap-
Ag markets at the CBOT started the week higher to sharply higher on Monday, led to the upside by the soy complex and the wheat market which both saw enough buying to push out to new highs for their moves despite the sell-offs seen to end the week on Friday. In the beans, new China rumors were once again the main source of excitement here, while the wheat market saw buying allegedly based on a news story that Russian saboteurs had blown up a train track in Poland that connects the capital, Warsaw, with Ukraine's border.
Corn Summary-
Corn futures were the follower in the space to start the week on Monday, with news in the beans and wheat stealing the bulk of the headlines throughout the day. That said, the market still put in a higher close to start the week on the back of another exceptionally strong export inspections report, which was encouraging following price action on Friday. With the USDA's November crop update now behind us, it likely becomes a matter of wait and see in the corn market from two different standpoints. First, there will continue to be part of the trade that thinks yields are significantly over-stated and this group will be adamant that another, bigger, cut is coming when the government gives final numbers in January. Then second, the safrinha crop in Brazil, which represents the bulk of production between them and Argentina, isn't planted for the most part until after soybeans are harvested in January and February, meaning we're a long way from knowing exactly what production there will look like. This scenario creates a choppy price environment, where both the bulls and the bears are likely to struggle for control.
Soybean Summary-
Busy day in the soy complex to start the week this week, as weekend comments from Trump and Treasury Secretary Bessent mixed with new cash rumors of Chinese bean purchases this morning spurred a swift reversal from the sell-off seen going home last week. On one hand, and clearly the hand most traders were looking at, the comments from the Trump administration are friendly in that they continue to tout optimism regarding the recently agreed to deal and that China will adhere to its contents. However, on the other hand and like we touched on this morning, that the timing of these alleged purchases is already seemingly getting pushed back from "by January 1" to "sometime in spring" would not, to us, seem overly positive. With China's December import needs assumed to be mostly covered and Brazilian beans significantly cheaper than those out of the US basically from now until June, we are having a hard time seeing the window between now and spring in which these purchases are going to be filled.
Wheat Summary-
Wheat futures rebounded right back to the highs made on Friday morning last week by mid-morning this morning and stayed there for the most part throughout the rest of the day and into the close on news headlines that what are believed to be Russian saboteurs blew up part of a rain line in Poland that connects the country's capital, Warsaw, and the border with Ukraine. It's unclear what the Ukrainian response to this might be, but what the episode does clearly illustrate is that both sides are seemingly ramping up attacks on infrastructure and other key logistical targets as the fighting drags on, and this is causing traders to again inject a slight measure of war premium.
Outside News Headlines-
Crude oil futures down $0.20+/bbl.
Weather Updates-
Midwest weather will likely see a shift to wetter conditions than have been seen in recent days tonight into Tuesday, with models in good agreement on a small system providing up to a half inch or so of rainfall to a narrow band through southern MN/WI. Most of the rest of the Midwest also sees light rain potential overnight tonight and into tomorrow, but totals will generally be less than tenth.
Then later in the week, a bigger system looks to provide heavier rains to more of the southern Midwest and the mid-south, where 0.5" to 1.5" looks possible from eastern KS/OK and then over into WV/PA between Thursday and Sunday. Temperature-wise, maps have last week's heat generally confined to the southeast this week, but things will still be mostly above average through most of the eastern US again over the next several days and into the weekend.
Week two precip forecasts have under preformed of late due to the failure of any sort of low pressure to be able to set up over the central part of the US that would send storm systems up through the heart of the country that would be full of moisture from the Gulf. However, today's solutions have continued to stick with this trend, and again show the mid-section of the US, especially the south-central part of the country, in an above average precip pattern into the end of the month.
Temperature outlooks in the 10-15 day period shifted notably cooler over the weekend, and now show a large pocket of arctic air moving in from the far eastern part of AK south and east through Canada and into the north-central US by the end of the month. The latest weeks 3-4 outlook from the climate prediction center is also in agreement on this outlook, which is raising our confidence.
Following decent rainfall across the eastern 2/3's of Argentina and up into southern Brazil over the weekend, forecasts for this week show a few days of drier conditions for the prior before a rain event returns Thursday/Friday, while Brazil sees rains continuing through the southern part of the country, before a pattern shift occurs at mid-week to bring more moisture back into the northern and central areas.
The 12Z run for the EU model doesn't update as quick as the GFS model, but the two remain in noted disagreement over the precip potential for the bulk of Brazil over the next 10 days, with the EU wet through almost all of the country, while the GFS is wet along the east coast but drier through the bulk of the country's growing regions. Data for Mato Grosso specifically shows the state at about 7" of rainfall below the average over the last 60 days, further illustrating the need for moisture return into the end of the month.
Enjoy it!
Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com
