Perspective: Mid-Day Commentary for January 3

By: Arlan Suderman, Chief Commodities Economist

Fri, 03 Jan 2025, 17:31

Perspective: Mid-Day Commentary

Arlan Suderman

Chief Commodities Economist

January 3 - Stocks posted solid gains at midday, as optimism returns to Wall Street. The VIX dropped back below 17 and the dollar index fell back from yesterday's 25-month highs to trade near 108.9. Yields on 10-year Treasuries are trading near 4.57%, while yields on 2-year Treasuries are trading near 4.25%, as the yield curve continues to slowly steepen. Crude oil prices are trading 1% higher to fresh 11-week highs as Arctic air threatens to flood much of the eastern United States. The grain and oilseed markets came under active selling pressure today, with the momentum-trading algos punishing these markets that had posted good gains through the holiday period.

The U.S. Treasury Department and Internal Revenue Service jointly released the final rules for section 45V Clean Hydrogen Production Tax Credits today, raising hopes that the 45Z guidlines for liquid biofuels will be released soon as well. The guidelines were part of the so-called Inflation Reduction Act passed during the Biden Administration. However, fuel producers will worry that the incoming Trump Administration will change the guidelines, making them reluctant to purchase feedstock for fuel production until they know the Trump Administration's position, leaving the industry in limbo for a while longer.

Argentina corn planting stands at 87%, according to the Buenos Aires Grain Exchange, up fro 70% a year ago, and up from the 10-year average of 84%. The BAGE did not release corn condition ratings this week, but they were rated at 47% Good to Excellent last week, which is relatively high for them for this time of year. Soybean planting progress reached 93% complete this week, up from 79% last year, and up from the 10-year average for the week of 86%. The crop is rated at 53% Good to Excellent, up from 42% a year ago, and up from the five-year average for the week of 37%, but trending lower as dryness builds across many areas of the belt. Dryness is now building across the northeastern half of Argentina's crop belt, stretching up into the southern third of Brazil's crop belt. Forecasters expect rains in the last half of January to reduced the area under stress to the southern 25% of Brazil, while 50% of Argentina's crop belt may remain under stress through January.

Exporters sold 30.6 million bushels of corn in the week ending December 26, as shown below, along with 17.8 million bushels of soybeans, 5.2 million bushels of wheat, and 0.7 million bushels of grain sorghum. The totals were pretty disappointing overall, but not that far off of seasonal levels for the holiday week. We've certainly seen higher sales totals during the week, and we've seen lower totals, but in the end, they were relatively close to seasonal levels for the week. Mexico was the featured buyer of U.S. corn during the week at a net 11.5 million bushels, although that included 3.2 million bushels switched from previous purchases by "unknown destinations." China was the featured buyer of U.S. soybeans during the week at a net 22.7 million bushels, although half of that - 11.6 million bushels - was switched from previous purchases by "unknown destinations." Marketing year to date corn export sales to all destinations total 1.528 billion bushels, up from 1.173 billion bushels at this point last year, and 208 million bushels above the seasonal pace needed to hit USDA's recently revised export target. Marketing year to date soybean export sales to all destinations total 1.476 billion bushels, up from 1.335 billlion bushels at this point last year, and 101 million bushels above the seasonal pace needed to hit USDA's target for the year.

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Mike CastleTue, 04 Aug 2026, 14:58

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