Welcome to the table for the Friday, December 13th, 2024 installment of Market Plus.

And joining us back, Naomi Blohm We're going to continue that discussion that we had earlier.

And I first question today is from Mitchell in Iowa.

And he says, is there a chance, if any, that one of these grain markets will give us a merry Christmas rally?

And you've talked this week about the Christmas rally or holiday rally, right?

Right.

Absolutely.

So I did some research and I had shared it on Twitter X a couple weeks ago to say that between November 20th.

So Thanksgiving ish until the end of December, there usually is some sort of rally for corn and soybean prices.

And so for the past decade, the average .. rally for corn has been $0.33, and the average rally for beans was actually closer to almost $0.90.

But what we've been finding, of course, is that in the years when you look at each each year over the past decade, in the years where there's bigger carry out, the rallies are on the smaller side, of course, of the average.

So knowing that in general we have bigger corn carryout and bigger soybean carryout, you know, I don't .. for any of those big rallies.

And I think we would be surprised if we had the average rally.

But corn actually had a near 26 cent rally since November 20th.

You know, the Thanksgiving into the time frame and so we've we've had $0.26 of that Christmas rally.

So when you look also at the specific data, what you'll notice is that either the Christmas rally comes to a halt in conjunction with the December WASD report, or it'll continue all the way until Christmas and the end of the year.

So now the question is for corn.

Was that it?

Did we just have our Chris.. Was it done?

So we'll find out in a c..

But the thing is with corn for for again that March corn price to have a reason to clear 450 it's a very, very big important resistance area on the charts.

We need essentially three things to happen with news.

We need the weather in South America to turn hot and dry.

We're going to need to see some additional flash sales of exports in the morning, for for that corn market.

And then we're also going to just be needing to see, or anticipate a friendly January USDA report.

So we don't actually have to see the friendly January report.

We need to anticipate that it's going to be friendly.

So you need those three things to happen.

But the funds are long, over 100,000 contracts of corn right now.

And they're defending that for the moment.

You know, they are they're staying long corn because corn really is a friendly story.

But now when you switch over to soybeans, the average rally, as I said, was closer to $0.90.

And then the years with bigger carryout, it was more like a 60 cent rally.

And we've only had a 25 cent rally since Thanksgiving and we are just stuck.

But I think that's because we have never had global ending stocks for soybeans as big as what they are now.

And there really isn't a weather issue happening in South America.

So I'm not quite sure.

you know, what would help is if the current administration gave.. some really wonderful news on the biofuels front, that would really help get things going.

But I think my bias is that we saw it.

Yeah.

And I think .. been here and it's done, and there's been a lot of cash grain that's been moved on this rally because the basis levels have been stronger.

So folks were able to get 450 cash corn, if not a little bit better.

And this was a big target.

So I think with year end bills coming due, I think with producers knowing that carryout levels around the world are sufficient, they just took advantage of the rally and made the sales and I think that would be my theme.

I think that in general, this maybe was as good as it gets, and I don't see the corn price falling apart.

But again, we don't have a big reason for it to rally.

And the soybeans do make me nervous just because how big the supplies are, here in the U.S. and around the world.

And as I said on the show, from a technical perspective, if beans can't find any friendly news, there's a dollar potential downside based on the chart formation and it's pretty normal for soybean prices to start to work lower after the calendar turns to January, because then we have a better idea.. And we know that export demand for our product kind of dries up, because now China is going to naturally switch to South America as their harvest becomes more available on March.

So, I think I have a little bit of a tone of caution for prices and reward yourself.

Give yourself a little Christmas present and maybe make some more corn sales on Monday.

Good advice.

All right.

Dan in Iowa is ask.. funds are long corn yet short soybeans historically.

How wide has that divergence gotten.

Yeah.

So that's an important question.

So the funds have been long corn about 100,000 con..

I didn't get to see that commitment of traders report from Friday afternoon, but they're still short beans and wheat.

So that tells me that maybe there's some spread trading going on between corn and beans or beans and wheat.

but in general, usually either the funds are all in on the long side for the grains, or they all get all in on the short side.

So as far as the specific divergence and how wide that's been, I am not quite sure, but I just my memory would say that what's happening now isn't normal.

So I would say that this might be, abnormal or a wider diver.. type of situation right now.

So I feel like once we get closer to the end of the year, once the calendar flips to January, we'll know if the funds get on board.

As far as wanting to be buyers and all three of those grains, or if they're going to want to be sellers.

And again, part of it goes back to that South American story and wea.. and the tariff news.

And that's the big unknown right now for the whole marketplace is how the world is going to respond to tariffs and the uncertainty that surrounds that.

It's all speculation.

Really.

Absolutely right.

Yeah, very much so.

Yeah.

Okay.

So Glenn in Ohio is asking, do you see any change in market direction between now and Inauguration Day, or are we rangebound until then?

So my biggest thought would be that we probably stay more on the rangebound side until the end of the year, but there is a seasonal tendency.

Without the inauguration, there is a seasonal tendency for grain prices to start to work lower in January and into then continuing into February, because then there's a lot more sales that occur in the first few days of January.

It's a new tax year for a lot of folks, and then we have a better idea of South American weather.

So I think that we're going to see quiet markets for a couple of weeks.

And then I want to be defensive going into Jan..

I think it's important to be defensive soybeans and the new crop beans, especially because, we know there's a big crop out there.

And I think it would be prudent to start to be a little mindful and be defensive, even a new crop, corn, because the market's anticipating that U.S. farmers are going to be planting more corn acres in the spring.

So that's going to be hard for December prices to have a reas.. And now, just today, we were hearing that maybe the second crop, corn in Brazil, that there's going to be even more acres planted there as well.

So the corn market, even though the story had got to be a little bit supportive this week with the USDA increasing demand and reducing ending stocks, we got a new calendar year that's just ready to steal the Thunder.

And, kind of maybe keep a lid on prices.

So I would start to lean defensive as we get closer to January 1st.

Okay.

But I'm curious.

So if more farmers are planning to plant corn, could that then be a good thing?

Would it be enough for it to be a good thing for bean prices?

Yeah, that's a great question because at one point, you know, does the marketplace does maybe beans have to potentially buy some acres.

And and the answer to that lies in how big is the South American crop going to be or not going to be.

And with ending stocks in the United States at 470 million bushels, we actually can afford to lose a few, like maybe a million acres of beans and not have it hurt our balance sheet too much.

Now, the unknown would be if we could get some friendly news on the biofuels front.

That would be new demand.

Now you got a game changer.

But we just haven't seen anything .. coming out of this administration.

And who knows what the next administration is going to do with it.

So again, I'm wanting to be cautious and defensive and it's going to take a lot of, perfect things to happen on the bullish side to really get that market to rally.

All right.

So our last question today comes from Trent.

He says any good marketing windows for 2025 crop on the horizon that we should be ready for.

Yeah.

So for 2025 crop.

So your best prices just looking at seasonal tendencies is that the first couple weeks of January is oftentimes a great window to start forward contracting.

And that can be really scary because you're like, okay, I'm not even sure what I'm going to be planting in the spring, and you're telling me to forward contract.

But that oftentimes is a wonderful window.

And then your next opportunity comes between Mother's Day and Father's Day.

So that's just based on seasonal tendencies.

But again, with the uncertainty and of the new..

I think I would be, pulling the trigger on some of those sales sooner than later.

Okay, Naomi, thanks as always.

Thanks for having me.

Yeah.

All right.

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Next week we take a look at two people who are saving seeds to help feed the world.

And we'll have commodity market analysis with Don Rose.

Thanks for joining us and have a great week.