Grains Start Day in the Red. Monday, December 2, 2024

March corn is down a penny this morning.

January soybeans are down 8¼¢.

March wheat contracts are lower. CBOT wheat is down 1¼¢. KC wheat is down 1¾¢. Minneapolis wheat is down 2¢.

“Grain and soybean futures are mostly in the red at the end of early trading, with corn and soybean futures under pressure from strong South American crop prospects and a strong dollar,” said The Brock Report following the overnight session. “Wheat futures have also been pressured by the strong dollar, and by stiff export market competition, with wheat from Russia, Ukraine, and Argentina being offered at low prices.”

The U.S. Dollar Index December contract is currently up to 106.67.

This morning USDA announced China is buying 134,000 metric tons of soybeans for the 2024/2025 marketing year.

On the subject of trade, Arlan Suderman, chief commodities economist at StoneX, said this morning that, “President-Elect Donald Trump continues to make headlines, even though he won’t be in office until Jan. 20…. One can argue that he’s already starting to implement policy with his statements. Wall Street took note of last week’s threat to use his executive powers on day one of his second term in office to put 25% tariffs on Canada and Mexico and 10% tariffs on all goods coming from China until illegal immigrants and drugs stop flowing across our borders. The threat got an immediate phone call from Canadian Prime Minister Justin Trudeau, that was followed by a dinner meeting between the two in Florida over the weekend. There’s a real possibility that differences between Trump and Trudeau will be worked out by Jan. 20.

“Trump’s tariff threat also triggered a call from Mexican President Claudia Sheinbaum that resulted in a dialogue on the issues. Sheinbaum, as a newly elected president, needed to look tough when talking to Trump, but there’s also a chance that an agreement can quickly be reached between her and Trump early next year as well. It will likely take more time to work things out with China, but China can ill-afford to escalate a trade war with the United States with its current weak economy.”

Suderman also noted, “[China] President Xi Jinping believes that the United States reached its point of economic and military strength in the world because the U.S. dollar has been the global currency of choice since World War II. He would like to topple the dollar from that position. Xi has worked to implement his strategy through BRICS and countries participating in his Belt and Road Initiative. Trump threatened over the weekend to put 100% tariffs on goods flowing from the nine member countries of BRICS if the bloc takes action to create a currency to replace the U.S. dollar.”

February live cattle are down 13¢ this morning. January feeder cattle are down 50¢. February lean hogs are up 88¢.

January crude oil is up 22¢.

December S&P 500 futures are up 4 points. December Dow futures are down 224 points.

Tags: corn, soybeans, wheat, futures, live cattle, feeder cattle, lean hogs