FROM ALL OF US AT TOTAL FARM MARKETING, HAVE A HAPPY AND PROSPEROUS NEW YEAR!

The CME and Total Farm Marketing offices will be closed Monday, January 1, in observance of New Year’s Day.

CORN HIGHLIGHTS:

• Corn futures ended the year with selling pressure as funds pushed their short position with the lack of overall bullish news, and friendlier weather forecasts for Brazil on a light volume trading day. March corn closed 3 cents lower on the session and was 1 ¾ cents lower on the week.
• Friday was the last trading session for the year. The March ‘24 corn contract traded 146 ¾ cents lower on the year from closing on 12/30/22 at 618. Prices have been impacted over the year by a growing corn supply, overall demand concerns with competition from global exporters, and a better-than-expected harvest this past fall.
• Weekly corn export sales were within expectations for last week. Exporters sold 1.242 MMT (48.9 mb) of corn last week with Mexico again the top buyer of U.S. corn. Total corn sales commitments now total 1.158 billion bushels, up 375 from a year ago.
• Grain markets saw selling pressure as the prospects of beneficial rainfall looks to hit key areas of Brazil over the weekend. The trend is looking to keep a more active weather pattern into January.
• Longer-term prospects in the corn market are concerned about an early start to the second crop Brazil corn.  A Bloomberg sourced article published today was detailing that due to dry weather, some areas are seeing earlier soybean harvest than expected, which is allowing producers to shift to planting the summer second crop corn.

SOYBEAN HIGHLIGHTS:

• Soybeans closed significantly lower to end the year, and while thin holiday trade may have caused a larger sell-off than markets would normally see, improved weather conditions for the majority of Brazil has been a bearish factor. Heavy scattered rains are falling over the country this afternoon in some of the driest areas.
• At the end of last year, March soybeans closed at 1399 ¾ and today they finished out the year at 1298, marking a loss of over a dollar, but soybeans have still held up better than corn and wheat have. For the month, March soybeans lost 64 ¼ cents, March soybean meal lost $28.20, and March soybean oil lost 3.87 cents.
• While weather is turning wetter for Brazil, some soybeans that were planted early in the central region were not able to withstand the early drought and heat, and some are being either ripped up or harvested early so that corn or cotton can be planted on time. This could bring some support to prices moving into the new year.
• Export sales for soybeans were on the soft side at 36.2 mb for 23/24, which was down 51% from the previous week and 38% from the prior 4-week average. Export shipments of 44.7 mb were well above the 26.9 mb needed each week to achieve the USDA’s export estimate. Primary destinations were to China, Japan, and Mexico.

WHEAT HIGHLIGHTS:

• Wheat ended the week on the softer side, with a mostly lower close across the board. However, for the week, March Chicago wheat did gain 11-3/4 cents, and its KC counterpart ended up 19 cents. With markets closed next Monday for the New Year’s holiday, the shortened trading week may bring some added volatility.
• The USDA reported an increase of 10.2 mb of wheat export sales for 23/24 and an increase of 1.5 mb for 24/25. Shipments last week at 12.6 mb were below the 16.8 mb pace needed per week to reach the USDA export goal of 725 mb for 23/24.
• Egypt cancelled an international wheat tender according to GASC (their state grain buyer). No purchase was made, but the reasoning for the cancelation was not given. However, it is believed that the offers may have been too high priced.
• Despite news of one of the worst Russian strikes against Ukraine so far, it did not seem to affect the wheat market. At this point, it is likely that only a disruption to actual vessels or trade routes would factor in war premium. In the face of the risks, President Zelensky of Ukraine said that they have exported 12 million tons of cargo via their own corridor since Russia withdrew from the Black Sea Grain Initiative.
• According to the Buenos Aires Grain Exchange, Argentina’s wheat crop is now 70.9% harvested, compared with 65.2% last week. The production estimate was unchanged at 14.7 mmt. For reference, last year 12.2 mmt of wheat was collected.
• The USDA reported that as of December 26, about 30% of the US winter wheat production area is experiencing drought conditions. This compares to last year when 69% of the crop was experiencing drought.

DAIRY HIGHLIGHTS:

• Spot cheddar saw an improvement of 4.375 cents over the last week. There was also better trade volume this week compared to recent weeks with cheese seeing 75 total loads throughout the short week.
• Spot whey was unchanged on the day at $0.3850/lb but still saw a gain of 0.50 cents over the week.
• Class III saw a nice bounce after the Christmas holiday only to fall heading into the weekend. The 2024 Class III average sits at just $17.62 which is nearly $2 cheaper than Class IV.
• Spot butter posted an impressive 12.50 cent rally from last week to close at $2.6650/lb. Powder also saw a penny improvement from last week to close at $1.1700/lb.
• Class IV prices have held together much better than Class III thanks to a strong butter market. The 2024 Class IV average is at $19.61/cwt which is a $1.99/cwt premium to Class III.

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Author

John Heinberg