Happy New Year’s Eve!

The last trading day of 2024 is greeted with another overnight rally. Corn is recovering from yesterday’s selling, coming within pennies of the high that brought about another swift bout of farmer selling that is being absorbed ahead of the end of the tax year. Soybean futures are higher, led again by none other than soybean meal. Yesterday’s COT report showed that funds had actually increased their shorts to 96,400 contracts as of December 24. That means the recent rally was not about short covering but more about end users extending forward coverage concerned about Argentine weather.

Deliveries this morning for January soybeans were 109 receipts, while deliveries for soybean meal were massive at 1116 contracts. The heavy deliveries met with strong commercial hands and, with the large fund short, muted the delivery process.

Going into 2025, China has approved 12 types of GM soybeans, corn, and cotton to expand the use of GM seed. China will provide farmers with GM seed to boost yield/productivity, enhancing food security. China National Seed Group is a subsidiary of Syngenta, and the hope is that widespread planting of GM crops will boost China’s crop yield by 5-15% in 2025.

South American weather continues to maintain with previous day runs, which increases confidence in the solutions. Below-normal rain will fall across Argentina, while near to below-normal rain will occur across most of Brazil, but that excludes the southern state of Río Grande do Sul. Starting Thursday, the warming trend across Argentina will raise daily high temperatures from the upper 80s to the 90s. Near to below-normal temperatures prevail across Brazil, with highs there ranging in the 80s to lower 90s. Argentine showers will occur in the 10-day window, but showers and coverage will be disappointing.

Cattle futures closed mixed yesterday, while feeder cattle were higher. December live cattle closed higher and above $194 for the first time in over a year, with expiration set for later today. Cash markets were quiet, but the Packers will be buying for a full work week. Active trade is not expected until late in the week, but rising beef prices increase the odds of higher cash trade. Choice cutouts gained $2.99 to $325.37, while select was higher by $3.63 at $ 294.76. Both values are in the year at record seasonal prices.

Yesterday afternoon’s Commitment of Traders report revealed that in the week ending December 24, funds sold 5779 contracts against commercial buying of 8777 contracts. Fund length of 128,600 and commercial shorts of 106 9000 contracts are historically large but far from record levels in 2019. The futures board is at a discount to the cash live cattle trade, which is supporting February cattle into the beginning of the new year. A cold weather snap that looks to extend into the Midwest next week will reduce weight gains, eliminating beef supplies that will not be recaptured without extending feedlot stay.