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Corn is singing the song of Christmas, as Naomi Blohm last month suggested it might. Soybeans and wheat are harmonizing in a way that should catch the ear of every farmer with 2025 grain to sell or, perhaps, those who are ready to commit 2026 production. It’s only polite to thank the market gods for this long-awaited gift by rewarding the rally. Pro tip: Ed Usset is waiting for $5 corn before selling 2026.
The question, as always, is how long the rally will last and how long farmers on more than one continent can continue to feed the world while struggling to fund their farms. Iowa farmer Matthew Kruse, president of Commstock Investments, weighs into the conversation on Ag Marketing IQ In Depth, calling in from his farm in Brazil.
Kruse is in Brazil for Christmas with family but admits the warm weather is a delightful bonus. As a farmer, he’s enjoying a dry period in the Minas Gerais region of Brazil, a welcome development after a stretch that left soybean fields soggy.
In the U.S., don’t look at this mild Christmas as a predictor of the rest of winter. On Ag Wx, Eric Snodgrass calls the coming weather “loopy,” not in a “too much Christmas punch” kind of way but in a global weather shift from one cycle to another.
On Wall St., traders drifted away from the markets and toward the holiday buffet. The uptick nearly across the ag markets wasn’t felt in stocks. This generally feels like a waiting period, and perhaps a sign that ag traders aren’t the only ones feeling cold winds from the Far East. BarChart this morning reported: “China’s central bank today issued a cautious statement after its quarterly monetary policy meeting. The PBOC indicated that it is focused on long-term stability and suggested that it will not engage in sudden interest rate cuts to address problems such as property market weakness, weak domestic demand, and the trade war with the U.S.”
Believe China? Not so much. However, outside observers see a softening economy in China and decreased overall demand overall from an aging population.
On the other hand, BarChart pulled this nugget from the stocking: “Seasonal factors are bullish for stocks. According to data from Citadel Securities, since 1928, the S&P 500 has risen 75% of the time in the last two weeks of December, climbing 1.3% on average.”
Corn
With an early close for Christmas Eve, March 26 corn was at $4.50, coming a penny off the day’s high.
That’s a positive marker for traders looking for an upward trend. Whether it will hold? Well, that depends on how much credibility you give USDA numbers. Prices currently seem to be moving on strong export demand. The export sales report as of Dec. 11 has total corn export commitments at 47.579 MMT, which is 31% above a year ago. That’s on pace with USDA’s record projection. Also worth noting is actual shipments are 28% of that projection, ahead of the 19% 5-year average.
But why the question about the credibility of the numbers? Well, because USDA’s numbers have long been questioned and the continual fluctuation since the government shutdown increases that skepticism. Almond growers, vocal for many years about disagreement with the numbers coming from USDA’s National Agricultural Statistics Service, decided this month to stop funding the agency’s reporting on their crops.
Pro Tip: Keep an “ear” on the rumor mill. Though corn is generally not part of the China conversation, Arlan Suderman, chief commodities economist at StoneX, suggests in a blog this morning that it might move to the headline: “China started offering small volumes of imported corn from 2021 -2023 at auction to end users, and it kept getting snatched up at higher prices than offered. … This has raised speculation inside of China that it might need to import more corn than expected due to shrinking reserves of it.”
In the meantime, managed money stepped back to a net long position of 52,672 contracts in corn, as of CFTC’s Commitment of Traders report for the week ending Dec. 16. Could be something to watch or may simply be a sign of self-care: Traders may be taking a break.
Soybeans
Soybeans are still below the $11 range that farmers desire and the market seems to shun. That said, with gains across the soy complex on Wednesday, it might be wise to reward the rally while it lasts, say those watching Brazil’s crop and studying China’s buying habits. Brazil will start bringing beans to harvest in late January and China is a bargain buyer.
“Brazil’s crop is very competitive,” Commstock Investments President Matthew Kruse says on this week’s Ag Marketing IQ In Depth. If China meets its minimum trade requirements with the U.S. Kruse says, “They’ll likely go back to buying Brazil’s crop. That’s going to hurt us.”
Winter wheat
A lackluster wheat market suddenly showed signs of life last week and prices continued to climb into the Christmas holiday. Some suggest the market simply built the long-running way in Ukraine into pricing and demand given the resilience of farmers there. However, with fighting continuing, port destruction and shipping channel disruption are raising supply concerns. It’s one thing to grow a crop, another to get it to your customers.
That said, wheat prices rose nearly across the board for the fifth consecutive day, marking the longest market rally since April. Can March HRW break the resistance price of $5.35? Hedge your bets with $5 on the downside and ask Santa for a push north of $6.
With Silent Night sounding early for the stock market, will well-rested traders hit the ground running when the bell chimes at 8:30 a.m. on Friday? Or will traders continue to enjoy a merry little Christmas through the weekend?
We’ll let you know on Friday. Merry Christmas and high prices to all!