Written Commentary
MORNING COMMENTS
Macroeconomics:
Consumer prices account for a majority of overall inflation. The Consumer Price Index (CPI) report this morning was in line with expectations. Core CPI has been flat month over month September October and November, at at 0.3%. CPI year over year was in line with expectations at 2.6%, slightly higher than last month but 2.5% less than the average for the last 4 years during President Biden’s term. The CPI chart can be seen below and it does look like a “soft landing” for now. We have the PPI report out tomorrow along with jobless claims.
Ag Fundamentals:
Mexico bought another 400K MT of corn this morning. the US also sold an additional 290K MT of corn to unknown destinations. The new CPA appointee is being looked at by many across the agriculture space as a bearish. Lee Zeldin is expected to use his position as the head of the EPA to role back regulations set during President Biden’s term. This would mean “drill baby drill”, attempt to lower energy cost, boost the auto industry and roll back the goal of 50% electric vehicles on the road by 2030. Zeldin has stated the importance of clean energy and increasing the use of AI to improve energy efficiencies. Harvest is within 5% of the finish line for both corn and beans in the US. Winter wheat conditions are improving. Australia and Argentina are in the heart of wheat harvest and are seeing better than expected yields.
The Consumer Price Index (CPI) y/y Chart below shows what the CPI report did between the Trump and Biden administrations. I only bring this up because all current reports are being closely compared to Trump’s first term. This is a very important indication of the state of inflation.
Trump Average: 1.9%
Trump High: 2.9%
Biden Average: 5.1%
Biden High: 9.1%
10-Day Precipitation Forecast for South America is painting a very “Monsoon” picture.
Export & World News
400K MT of corn sold top Mexico, and 290K Mt of corn sold to unknown destinations this morning. Jordan bought 60K MT of hard milling wheat. South Korea bought up to 70K MT of animal feed corn, 65K MT of animal feed wheat, and are looking to buy 60K MT of soymeal.
Malaysian palm oil futures were down 39 ringgit overnight, at 4987
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
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