CORN HIGHLIGHTS:

• Pressure from the wheat market on the prospects of better conditions in the southern Plains spilled over into the corn market on the session. March corn futures 3 cents as traded lower for the third consecutive day and established a new low for the March contract at 468 ¼.
• US Customs and Border Protection has maintained the closure of the Eagle Pass and El Paso rail gateways to Mexico to handle migrant surges. The closures are causing disruptions in supply movements and remain despite calls for the gateways to reopen from the Association of American Railroads and various Ag commodity groups.
• South American weather forecasts are staying supportive for the crop going into the end of the year with improved precipitation. The improved weather forecast is limiting buying strength in the corn and soybean markets.
• Ethanol average daily production for the week ending December 15 averaged 1.071 million barrels. This was down 0.3% from last week and up 4.1% from last year. The amount of corn used for the week is estimated at 106.30 million bushels. This pace is slightly ahead of the USDA target for the marketing year.
• USDA will release weekly export sales on Thursday morning. Expectations are for new sales last week to range from 800,000 to 1,500,000 mt for the week.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower for the second consecutive trading session with pressure from an improving Brazilian weather forecast and widespread showers over the central region of the country today. Both soy products were lower, but the majority of losses were in soybean meal.
• Although weather forecasts are improved for Brazil, production for the main soybean growing state of Mato Grosso is now forecast to produce 20% fewer soybeans this season. The lowest estimates for the entire country are around 155 mmt which is what was produced last season, and this year, Argentina is also expecting a normal soybean crop. The combined production of both countries could put pressure on US soybean prices.
• Argentinian weather has been very favorable, and the country can likely expect normal to above normal production. This would lead to increased crush numbers and increased exports of both soybean meal and oil. If Argentina regains its status as the largest exporter of meal, US soybean meal prices could fall further and pressure soybeans. Soybean oil could be buoyed by strong demand for bean oil as biofuel in the US.
• Two main rail bridges to Mexico have been closed by US customs at Eagle Pass and El Paso due to large congregations of migrants. This has made shipments to Mexico more difficult and likely added to today’s pressure in the soy complex.

WHEAT HIGHLIGHTS:

• Wheat gave back all of yesterday’s gains and then some. Weakness today stemmed from consolidation in the US Dollar Index, a mixed close in Paris milling wheat, and a wetter nearby forecast in the US southern plains. Additionally, global freight costs are increasing due to low water levels on the Panama Canal and Houthi attacks on Red Sea shipping lanes; the rising costs may be reducing export competitiveness of US goods to some parts of the world.
• Egypt’s tender did end up being fulfilled by Russia for all 480,000 mt. Of the total, 180,000 mt are to be shipped during the first half of February, while the remaining 300,000 mt will be shipped during the second half of February.
• Despite an increased estimate of Ukraine’s 2023 grain harvest by consultancy APK-Inform, they kept their wheat production estimate unchanged at 21.5 mmt. The total grain harvest estimate was increased by 1.6 mmt to 56.3 mmt. However, that change is mostly reflected in the corn production number.
• According to state-run news agency Xinhua, China has vowed to focus on grain and ag production during a recent conference. Their goal is said to be to strengthen the use of technology in agriculture, boost grain yields, and ensure that grain production in 2024 exceeds 650 mmt. As they work towards becoming more self-sufficient, this may mean reduced imports of US goods over the coming years.
• An investment group in Brazil is looking to invest $62 million into a port terminal with a capacity of 3 mmt of grain. The reason behind the expansion is believed to be an attempt to reduce congestion on the roads from the transport of ag goods. The investment decision is expected to take place during the first half of 2024. Brazil continues to increase ag exports every year, and investment into port infrastructure may add pressure to the US export market down the road.

DAIRY HIGHLIGHTS:

• Despite Tuesday’s GDT Auction results coming in as friendly to the global markets and a sign that world dairy prices are coming off of 5-year lows, the US trade remains stagnant.
• For the week, US spot cheese is down 6.50c, whey is down 1.50c, and powder is down a quarter of a cent.
• The block/barrel average cheese price made a new low for the move on Wednesday, dropping another 1.25c to $1.42/lb.
• Butter was neutral Wednesday after gaining 5.75c on both Monday and Tuesday. Butter is trading only about 35c off the low of the year.
• Milk futures were quiet Wednesday with more offering, with a few contracts able to close slightly green.

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Author

Amanda Brill