Daily Ag Direction 1/27/25
Good Morning!
The wheat market continues to sell off after attempting a breakout at $5.85. Support in the current channel rests at $5.41. It appears that the market will continue to trade rangebound until spring weather becomes a factor. US wheat is back in the export mix and funds continue to hold a big short in this market. Near term market moves could come from the funds unraveling that short as seasonals will become a bigger factor. Good rainfall estimates for the southern US will alleviate some of the concerns about dryness that has taken hold of northern Oklahoma and parts of Kansas. The Trump administration is threatening tariffs on Columbia, Mexico and Canada which is being blamed for some of the weakness in grains. Argentina and Brazil saw good rains over the weekend which will stop the bleeding in Argentina crop ratings. China suspended 5 companies from importing beans as they did not meet phyto regulations. These bans will last 2 months. Those companies imported 30% of the Brazilian beans into China last year. Friday’s cattle on feed report showed cattle on feed at 99.1% of a year ago. Dec placements are at 96.7% and Dec marketings are at 101%. Placements were about 60,000 head below estimates with Texas posting smaller numbers due to a closed Mexican border for feeder cattle imports. Cash cattle continue to reach new heights as demand far outweighs offerings.
Mar KC Wheat -9.2 @ $5.50
July 25 KC Wheat -9.0 @ $5.70
Mar Corn -7.4 @ $4.79
Dec 25 Corn -6.2 @ $4.55
Mar Beans -12.0 @ $10.44
Nov 25 Beans -9.2 @ $10.40
Mar Feeders +1.650 @ $278.225
Feb Live +1.675 @ $206.450
Please reach out to your CEA Risk Management Advisor if you have any questions. Have a great day!
-Trent
