12/23/2024 Hurray for Café, Pigs May Fly

On the Grains
The first day of the week and the last full trading day until Friday started off stronger than expected, early calls yesterday were slightly lower. Brazilian 1st crop of corn was essentially done two weeks ago, and we now wait and see the weather. World balance sheets are not all that burdensome on corn, that 2nd crop of corn will be vital to setting the pace for US exports into July/Aug/Sep, plenty of risk remains unpriced in this market yet. Our range on March corn seems to be tightening up again as the resistance is $4.52 and support at $4.40. Low trade volume for the rest of the year could produce a breakout for either side. Other potential “black swans” remain if the Biden administration fails to produce the 45z. A repeal of the Inflation Reduction Act will take an act of Congress, but the House and Senate are on the same team, so it is possible. This might not be all that bad if they would allow for ethanol without meeting the 50 kg of carbon per million BTU or reworking the scoring system. I would expect that would be a brutal battle.