1.18.25 Tredas Recap
Weekly Action:
March25 Corn up 14 at $4.85
March25 Beans up 10 at $10.36
March25 KC Wheat down 2 at $5.49
Feb25 Hogs down 1.425 at $81.075
Feb25 Fats down 1.875 at $196.925
March25 Feeders down 1.25 at $268.450
Dec25 Corn up 6 at $4.56
Nov25 Beans down 3 at $10.28
July25 KC Wheat down 2 at $5.67
*U.S. grain and livestock markets will be closed Monday for Martin Luther King, Jr. Day. Markets will open normally at 7pm Monday evening.
Grains:
Grain markets looked to have a spooky week but a phone call between President-elect Trump and President Xi of China Friday morning appeared non contentious and to be optimistic towards US/China trade. Grain markets rallied after the call.
There is a lot of uneasiness/fear surrounding talk of tariffs in the ag community. Let’s look back at the Trump Administration trade decisions to see how they affected futures markets.
The Commitment of Traders Report Friday showed a few notable things:
Funds continue to add to their corn longs, adding 38k contracts. Now long 292k.
Funds flipped from short beans to long beans. Now long 35k. (bought nearly 65k last week)
Funds are record long 28k Feeder Cattle
Funds are within 10k contracts of record long Live Cattle
Wheat is about the only row crop funds are short (small short)
On the physical side:
Producers/Merchants (elevators and end users) are grew their short positions
They are now short 540k contracts of corn (insinuating 2.7 billion bushels of “ownership”)
They are short 120k contracts of soybeans (insinuating 600 million bushels of “ownership”), which is double from last week
This is probably not friendly basis in the near term
Steak n Shake announced they will only be using 100% beef tallow by the end of February.
Dressed formula weights for steers last week increased eight pounds, averaging 988 pounds. This is a 4.8% increase from last year.
Weather:
Winter is back! Freezing temperatures will be present to start next week.
Distressed areas in South America should receive beneficial rainfall over the near term. The potential for big crops is still in play.
Are we setting up for a drought in the west? Below is the most recent UNL Drought Monitor. Something that must be a historical anomaly: Colorado seems to be the most hydrated state west of the Mississippi River.
Economy:
Canadian Prime Minister Justin Trudeau announced last week he will resign from his post once a replacement is elected. Since coming to power, Canadian GDP has dramatically under achieved relative to the U.S.
An estimated 70% of Wisconsin’s dairy farm workforce are immigrants, and most of them are undocumented.
A 20-year study found 70% of wealthy families lost their wealth by the second generation, and 90% lost their wealth by the third generation.
Mortgage demand is down 53% from the pandemic peak. The last time volume was this low was 1995. Roughly 75% of loan officers from 2021 have not renewed their license for 2025.
What would need to happen to get back to pre-pandemic housing affordability levels?
US incomes spike 60%
US home prices fall 38%
Mortgage rates at 2.23%
On Friday, the Supreme Court upheld a ban on TikTok. As of this writing, TikTok will be removed by app stores Sunday. The Biden Administration has signaled it will let the Trump Administration enforce the law.
What could happen? ByteDance (the parent company) could still find a US buyer by Sunday. President Trump could delay the ban for 90 days if there’s evidence ByteDance is working towards a sale. Trump’s administration could also choose to not enforce the law and leave things operating as they are.
Something That Probably Means Nothing:
During World War II, the United States had seven four-star generals. Today, we have 44.
Quote of the Week:
“Juuuuuust a bit outside.” -Bob Uecker as Harry Doyle in Major League.
“Mr. Baseball” passed away this week at the age of 90. His Hall of Fame acceptance speech is a good use of 20 minutes.
https://www.youtube.com/watch?v=h7dG5HCKeWA
