MARKET COMMENTARIES
Evening Comments (RJ O'Brien)
Evening Grain Comments - February 6th, 2025
Corn
Corn rallied about 7c from 488 and was coincident with two items: 1) Deteriorating rainfall expectations in parts of south American. Mid-morning USTR Nominee Greer mentioning the administration’s intent to review China’s compliance with Phase 1 trade deal (signed Jan 2020), and implied the administration intends to enforce the deal. This deal outlined Chinese commitments to buy $32B in agricultural products, $52 B in energy and $77B in manufactured goods from the US, however China did not fully meet the commitments largely due to COVID. Corn market is keen to see Brazil’s winter corn planting pace pick up this month.
Beans
Mixed close for the bean complex today as beans and oil finished firmer and meal was weaker. Beans had over a 16 cent trading range, meal was over $7 and oil was roughly .8 cents per pound. Early weakness appeared to be more weather related with some better-than-expected rains overnight and projections for some much needed rains for central and N. Argentina as well as S. Brazil. Other support was on news that U.S. Trade Rep nominee Greer told the senate he would quickly review China’s compliance with the Phase One trade deal and would be prepared to enforce the original terms. Export sales released this morning showed bean sales at 14.2 mbu vs 7.8 needed, meal sales were very strong at 531kmt (marketing year high) vs 168 needed and oil sales were 2.2kmt vs -4.9 needed. China was the leading buyer of beans at 7.7 mbu, followed by Netherlands at 4.6 and Egypt purchased 4.0. For meal the top 5 buyers were all 50kmt or higher and Unknown purchased 45kmt. Argentina’s weekly crop conditions were lowered again for beans dropping from 20% G/E last week to 17% this week.
Wheat
Wheat futures closed strong on Thursday with the winter wheats leading spring. KWH was +15 ¾ with KWN +14 ¼. WH was +15 ½ with WN +13 ¼. MWH settled +10 with MWU +10 ½. Export sales of 16.1 mbu were mid-range vs. expectations and above the 9.3 mbu pace to reach USDA’s annual total. New crop sales were 1.74 mbu. On the old crop end, HRW led the way at 6.4 mbu with SRW at 4.5 mbu, White at 2.9 mbu, HRS at 2.3 mbu, and Durum at 50kbu. Mexico, Panama, and Ecuador were the 1 mbu plus buyers. Crop markets in general got some support from ideas China might be pushed back to phase 1 trade agreement levels though the Chinese cash markets and stocks situations are different than they were pre-covid. Wheat saw some tech buying on the day across all 3 classes.
Brayden Miller
Broker Assistant
Advance Trading, Inc.