• Today is setting up to be a typical Tuesday, at least based on early activity. This brings to mind the fact it is the last day of the positioning week for noncommercial traders. 

• Gold was under light pressure, after trading higher to start the week.

• The Grains sector was mostly lower with the key being what looked to be a lack of commercial buying interest overnight. 

Morning Summary: What’s the first thing I notice about the commodity complex pre-dawn Tuesday? Many of the markets moved in in the opposite direction overnight of how they closed Monday. Why? It could be any number of reasons. Just for fun, if you want to ruffle the feathers of some in the commentary industry, ask them about “Turnaround Tuesday”. I remember playing that game with the late Gary Wilhelmi. As for markets, the US dollar index was showing a small gain after posting an even smaller loss at yesterday’s close. Recall from this space Monday that gold had rallied as much as $10.50 and was sitting in the green. This time around the clock the April issue (GCJ25) slipped as much as $19.80 and was sitting $10.50 lower to start the day. Silver and copper were also showing small losses. The Energies sector was mostly higher with WTI crude oil the outlier. Our old friend natural gas, aka the Widow Maker, must’ve taken a valium before going to bed as the spot-month contract was sitting 1.3 cents (0.3%) higher. It was a quieter night in Softs as well with May cocoa up $54 (per metric ton) early while May coffee showed a gain of 0.7 cent (per pound).  

Corn: The corn market was quietly lower pre-dawn. The May issue dropped as much as 2.25 cents overnight and was one tick off its session low on trade volume of about 17,000 contracts. Recall yesterday at this time the May issue had registered 30,000 contracts changing hands coming out of the weekend. Similar to Monday morning, I’m expecting the focus to be on the May-July futures spread. Yesterday saw this spread close at a carry of 5.0 cents, the largest carry since the daily close of November 4, and covered 23% calculated full commercial carry. While still bullish, the spread continues to indicate a growing confidence in Brazil’s safrinha (second) corn crop. Also on the fundamental side, the National Corn Index was calculated Monday evening near $4.52, down 8.25 cents from last Friday’s figure and putting national average basis calculations at 30.5 cents under March and 45 cents under May futures. Last Friday’s calculation came in at 44.75 cents under May. There is a lot going on with the new-crop Dec25 (ZCZ25) issue this week. The US government insurance price calculation period comes to an end, as does the 6-month tracking period of the Nov Soybean/Dec Corn futures spread. The latter has favored more corn/less soybean acres since the start of September. 

Soybeans: Speaking of soybeans, the market was near unchanged early Tuesday morning. The generally irrelevant March issue was showing a fractional gain as of this writing while the July issue was fractionally lower, with May actually sitting unchanged as we speak. Trade volume was light, as one would expect, indicating a lack of interest from Eastern Hemisphere buyers overnight. Fundamentally not much has changed with the May-July futures spread closing Monday at a carry of 15.75 cents and covering a neutral 57% calculated full commercial carry. The National Soybean Index came in Monday evening at $9.6850 putting national average basis calculations at 60.5 cents under March and 79.0 cents under May futures. Last Friday’s calculation came in at 79.5 cents under May with the previous 5-year low for the first weekly close of March (next week) at 81.5 cents under May. The bottom line is the US basis market remains weak. Technically, there isn’t much happening with the new-crop November contract (ZSX25) as it continues to consolidate between its 4-week high of $10.7575 and 4-week low of $10.3725. The contract closed Monday at $10.5175, down 8.0 cents for the day. With the end of February fast approaching, Nov25 has done all it could to NOT buy acres this spring. 

Wheat: The wheat sub-sector was mostly lower early Tuesday morning with the outlier being the HRS market where contracts were showing fractional gains. What stands out to me here is the May issue registered nearly 1,100 contracts changing hands, a solid night’s worth of activity for spring wheat. Recall at Monday’s close this same May issue was down 10.75 cents while the May-July futures spread held at a carry of 13.5 cents and covered a neutral-to-bearish 63% calculated full commercial carry. Which brings us to winter wheat, the HRW market specifically. I know there are folks still making a bullish argument for the 2025 market, and to them I have only one thing to say: The July-September futures spread closed Monday covering 85% calculated full commercial carry. End of story. However, if we did want to add something to that summary it would be the September-December spread also covered a bearish 73%. Early Tuesday morning finds the July HRW contract (KEN25) down 1.75 cents, after slipping as much as 2.25 cents overnight, on light trade volume of less than 500 contracts. The new-crop SRW issue lost as much as 5.0 cents overnight and was sitting one tick off its session low pre-dawn.