We kicked off the day with NFIB Business Optimism Index at 5:00 A.M., Nonfarm Productivity QoQ Final and Unit Labour Cost QoQ Final at 7:30 A.M., Redbook YoY at 7:55 A.M., 42-Day Bill Auction at 10:30 A.M., Crop Production, USDA Supply & Demand, and WASDE at 11:00 A.M., and API Energy Stocks at 3:30 P.M.

The US Dollar Index rallied sharply in November following the results of the US presidential election. The markets perception is that President Trump’s policies would focus on lowering US energy prices and strengthening the US dollar’s exchange rate against other currencies. However, large speculators were sellers of dollar index futures on the rally, and last weeks Commitment of Traders report showed fund’s largest net short position since March 2021. Historically, commodities have traded inversely to the dollar index. From the mid-1990’s to 2021, the correlation between the CRB and the Dollar Index was -69%. However, massive inflation of the US currency in the covid era has broken that long – standing relationship. Since 2021, the CRB/Dollar index has been +69%. The Dollar Index found a late November high near 108, while the CRB held a narrow range throughout 2024. Both markets look to stay rangebound into early 2025 when more is known about economic and trade policies of the incoming Trump Administration.

Photo by Jesse Gardner on Unsplash

Ag Resources (ARC) reports Farm Marketing Fills for Monday: Corn Producers: Sold late winter or spring cash corn sales at $4.48 , basis May CBOT. This pushes 2024 cash corn sales to 90%. If not filled go to market Monday night.

Ag Farm marketing advice for Today: Corn Producers: Sell/Hedge another 10% of the 2025 corn crop if December ’25 corn futures reach $4.41. This would take 2024 sales to 40%.

South American Weather Update

Drier Trend Returns to Argentina; Wetter Trend Returns to Northern Brazil; Heat Absent from All Regions:

The South American forecast into late December leans broadly favorable. Model guidance remains consistent in the projected return of near daily showers to central and northern Brazil after Dec 14^th, with recent abundance sunshine accelerating soybean growth rates there A drier trend is forecast in far south Brazil and Argentina, but this too is not threatening following moderate to heavy rainfall in Argentina last week and as the southern third of Brazil was soaked with precipitation accumulation of 3-5” over the weekend. Equally important is that extreme heat stays absent into the latter part of the month. Traders are still betting on record South American soybean production.

Central US Weather Pattern Discussion

US Temps Variable Next 5 Days; Abnormal Warmth Forecast Second Half of December:

The Central US forecast into Dec 24^th remains void of major/dangerous snow events, while also keeps frigid temps confined to Tues-Thurs of this week. There are hints that regional snow impacts the TX panhandle in the 11-15 day period, but otherwise accumulation of more than 4” favors the Upper Great Lakes. In the 6-10 day forecast we should have maximum temps in the 40’s & 50’s, which will be widespread. ARC’s climate scientist suggests a cooler January is possible, but the 16-30 day guidance from NOAA this evening keeps in place a pattern of much warmer than normal temps through Jan 5^th . US weather during winter will be most important for livestock following the shuttering of Mexican feeder cattle imports, there will be little/no tolerance or additional weather-based supply loss.

CBOT Corn Scores New Rally High; $4.48 March Next Resistance; Strong US Demand to Fade Without South American Weather Issue:

CBOT corn rallied for a third day on modest momentum – based buying. Chart patterns Friday turned supportive. Winter consumption will be strong – the seasonality of weekly US corn export inspections is starting to rise to October highs. However, any meaningful downward revision to US end stocks requires confirmed yield loss in South America – and thus continued robust export demand during spring and summer 2025. ARC highlighted that Argentina’s 2025 surplus will arrive earlier than in recent years. The strategy remains to use nearby seasonal strength to manage forward downside risk. A lack of heat in Argentina abundant moisture in southern Brazil is noted. Additionally, Brazilian producers are likely to maximize safrinha seedings as a weak Brazilian currency aids producer revenue.

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