The CME and Total Farm Marketing offices will be closed Monday, January 15, 2024,

in observance of Martin Luther King Jr. Day.

CORN HIGHLIGHTS:

• Grain markets saw strong selling pressure as a bearish USDA WASDE report reflected strong global and US corn supplies. The report brought increased yield adjustments for US production this past growing season. March corn futures traded to new contract lows, down 10 ¾ cents on the session. For the week, March corn futures lost 13 ¾ cents.
• The USDA raised US corn yield this past season to 177.3 bushels/acre, up 2.4 bushel from the December projection. This, taking away a small reduction in harvested acres raised corn production 107 mb over the December report. After demand adjustments, US corn ending stocks were raised 31 mb, and above market expectations. This projected carryout is 802 mb higher than last year.
• The USDA made changes in their forecast for South American production for this growing season. The USDA lowered projected Brazil corn production to 127 mmt, down 2 mmt from December, and left Argentina corn production unchanged. Both moves reflect the current weather situation in each country. Yesterday, the Rosario Grain Exchange raised the Argentina crop to a projected 59 mmt, which would be a record for the South American country.
• US Quarterly Grain Stocks as of December 1 for corn were 12.169 billion bushels, over 100 mb above analyst expectations, and 1.35 billion bushels larger than last year. The jump in stocks is reflective of the strong corn production in the US this past season.
• With the strong US and Argentina production, world corn ending stocks for corn are estimated at 325.22 mmt, up 10 mmt from last month and 12 mmt above the trade guesses for the report.

SOYBEAN HIGHLIGHTS:

• The USDA released its monthly WASDE update and quarterly grain stocks as of December 1. 23/24 production and ending stocks both came in above expectations, as did December 1 grain stocks to initially push soybeans 33 cents lower but close with just a 12 ¼ cent loss.
• US 23/24 ending stocks are now estimated at 280 mb, up 35 million from last month, with higher Dec. 1 stocks of 3.0 bb and production of 4.126 bb both contributing to the higher ending stocks.
• The USDA’s South American production estimates also came in above expectations. Brazil’s soybean production is now estimated at 157 mmt, versus the average trade guess of 156.26, and the USDA estimated Argentina’s production 2 mmt above the average guess of 48 mmt.
• With increases in both US and South American production, the USDA raised its projection for world ending stocks slightly from 114.21 mmt in December, to 114.6 mmt, where average trade expectations were for a net reduction to 111.58 mmt.
• Next Tuesday NOPA will release its monthly crush report relaying total crush amounts for the month of December. Average estimates are calling for a record 193.12 mb of soybeans crushed last month, if realized. The total would represent a 2.2% increase from November’s 189.038 mb crushed and an 8.8% increase from last year. Dec. 31 soybean oil stocks are estimated to increase 6.4% to 1.291 billion lbs.
• Rainfall totals in Mato Grosso, Brazil are expected to decline over the next couple of weeks. Although with the rain they have received recently, this shouldn’t cause much issue. However, some of the other drier areas of Brazil may get good rain coverage over the next couple of weeks.

WHEAT HIGHLIGHTS:

• Wheat closed lower in all three classes alongside Paris milling wheat, and as the US Dollar continues to consolidate. Of course, today’s price action had much more to do with all the data released by the USDA. Initially, wheat was a little higher just after the report came out, possibly because winter wheat acreage was estimated at 34.4 million acres versus an expected 35.9 ma. But the negative tone of the report in general weighed on wheat by the end of the session.
• The USDA pegged US wheat quarterly stocks for December 1 at 1.410 bb. The trade was looking for 1.383 bb, which compares to 1.780 bb in September and 1.312 bb in December 2022.
• US ending stocks for wheat came in at 647 mb, whereas the trade was looking for 658 mb. This is also a decline from the December report which was 659 mb. For the world number, the USDA estimated 260.0 mmt of wheat carryout, up from the average trade estimate of 258.3 mmt, and up from December at 258.2 mmt.
• For Russia and Ukraine, wheat exports were both raised slightly to 51.0 mmt and 14.0 mmt respectively. US wheat exports were left unchanged by the USDA at 725 mb. As far as other world numbers, production in Australia at 25.5 mmt and in Argentina at 15.0 mmt were both unchanged from last month by the USDA.
• According to the Buenos Aires Grain Exchange, their 23/24 wheat crop is 95% harvested, and their production estimate was unchanged from 15.1 mmt. For reference, this is up from 12.2 mmt last year.
• The NOAA Climate Prediction Center estimates a 73% chance that El Nino will become neutral this spring. In other words, the pattern should come to an end. This may provide good conditions for planting in the US this spring. They also suggested that after a neutral period, the pattern will have a 64% chance to switch back to La Nina by August.

DAIRY HIGHLIGHTS:

• Spot cheese saw a weekly gain of 8.125 cents heading into the weekend to close at $1.50375/lb. This was cheddar’s largest weekly improvement since the week of July 24th.
• Spot whey has continued to climb since December’s lows of 0.38/lb. Whey now sits at 0.43/lb which is its best weekly close since the end of March.
• Class III gave us some hope to start the week, but ultimately couldn’t hold the momentum dropping 11 cents from the high of the week to close at $17.50/cwt.
• Spot butter was the only product to see a loss over the week at just under a penny to close at $2.5675/cwt.
• Class IV prices trended lower on poor futures trading in butter. The 2024 Class IV average now sits at $19.61/cwt.

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Author

John Heinberg