CORN HIGHLIGHTS:

• Sellers stayed active in the corn market, pressured by soybeans as March corn lost 4 ¼ cents. With today’s close at 472 ¾, March corn established a new contract low close for the move. The intraday contract low is in reach at 470 ½ from November 29.
• US Customs and Border Protection announced on Sunday night that it would temporarily close the Eagle Pass and El Paso rail gateways to Mexico to handle migrant surges. The move closes the number 2 and 3 gateways by volume and is backing up Mexico bound freight including grains. Mexico has bought 47% of current US corn export sales.
• South American weather forecasts are staying supportive for the crop going into the end of the year with improved precipitation. Corn will stay a longer-term story with planting delays, unfavorable prices and dry weather limiting the potential acres for the key exportable second crop of Brazilian corn.
• Chinese corn prices on the Dalian Commodity Exchange are trading to a multi-month low pressured by the arrival of Brazil corn exports. In November, China imported 3.590 mmt of corn, up 384% from last year and a record for the month. Since January, Chinese corn imports are up 12% over last year, influenced by cheap South American corn prices.
• The softer tone of the market and the end of the calendar year should reduce farmer selling. Basis levels will likely stay firm, supported by friendly overall ethanol margins.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower, wiping out yesterday’s gains that were caused by the Argentine government’s announcement that export taxes for soybean meal would increase. Today, scattered showers in the driest areas of Brazil along with an improved long-term forecast pressured soybeans and meal while soybean oil ended higher thanks to higher crude and palm oil.
• Soybeans are currently at the bottom of their range, but the selloff today was a bit discouraging considering that the US dollar fell and that a flash sale was reported. These are both things that should have been supportive along with Argentina’s increase in export taxes which should have some bullish implications for meal.
• This morning, the USDA reported private exporter sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2023/2024 marketing year. While no sales were reported yesterday, there was a sale to either China or unknown destinations every day last week. This comes as the export window for the US nears its close with the looming Brazilian harvest.
• Brazil’s soybean exports for the year have exceeded 100 million tons for the first time ever following their record harvest of 155 mmt. Brazil is the world’s largest soybean exporter and will likely keep that title as the USDA forecasts a harvest in 2024 of 161 mmt. Some private analysts have predicted that production may be as low as 155 mmt.

WHEAT HIGHLIGHTS:

• All three US wheats rallied today, in the face of lower corn and soybean markets. This may be in part due to reports that wheat plantings in northern France are likely to remain incomplete due to the heavy rains they received, along with snow towards the end of planting. Apparently, about 10% of the intended area will remain unplanted.
• Egypt is tendering for more wheat. Russia will be the likely one to fulfill the tender, as they are the cheapest origin at $260 per ton FOB. France and Romania would be next in line but are about eight to ten dollars more per ton.
• Rumors that China may be looking to purchase more US soft wheat are unconfirmed at this time. However, this may have lent some support to futures in any case. The recent Chinese purchases were significant, and if they step up again, it is likely to be in a big way.
• Russia has stated that they have no interest in re-establishing the Black Sea Grain Initiative, despite efforts by Turkey to broker a deal. Since the corridor was closed in July, Ukraine has been able to ship 10 mmt of ag goods, but that is down 19% from last year.
• Argentina saw some severe storms recently that have left about half a million homes without power. As it pertains to the wheat market, the storm may have also caused some crop losses for crops that are ready to harvest, including wheat, as wind gusts were reported to be up to 93 miles per hour. Additionally, corn and soybeans plantings may face some delays.

DAIRY HIGHLIGHTS:

• Spot cheese saw a slight improvement after the GDT auction improved 2.30%. Blocks improved 0.25 cents, while barrels gained half a penny. Cheddar on the global market sits at $1.93/lb compared to $1.4325/lb in the spot market.
• Class III prices were little moved on the day with the May contract seeing the largest gain of 6 cents. The 2024 Class III average sits at just $17.69/cwt.
• Spot butter saw another impressive day climbing 5.75 cents to close at $2.6050/lb. Butter futures were all green with the January contract rising $2.8250/cwt.
• Class IV futures saw gains on a strong butter market. The 2024 Class IV average is at $1.80/cwt premium to Class III at $19.69/cwt.

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Author

Brandon Doherty