The CME and Total Farm Marketing offices will be closed
Monday, December 25, in observance of Christmas

CORN HIGHLIGHTS:

• The corn market held above the new recent low of 468 ¼ and reversed yesterday’s losses in two sided trade as it begins to consolidate ahead of the extended Christmas weekend.
• This morning, the USDA released weekly export sales as of December 14, and corn sales came in as expected, totaling 1.013 mmt (39.9 mb). Corn sales commitments now total 1.109 bb for 23/24 and are up 37% from a year ago. The current pace is ahead of USDA projections, but the market still needs to see consistent export sales totals.
• The closure of two major rail crossings into Mexico, caused by the migrant crises at the southern border, is limiting corn shipments into Mexico. It is currently estimated that about 1 mb of grain is being held up each day and that Mexico has about a 2 – 3 week supply. The closures may be adding resistance to prices with Mexico being the largest importer of US corn, and that they may need to look for other sources if the issue isn’t resolved soon.
• The recent price drop in corn has given the US an edge in the world export market, with US prices currently cheaper than Argentina and Brazil out of the market for now.
• The latest release of the US Drought Monitor shows that 46% of the US corn area is currently in drought areas, an increase of 2% from last week. Though with the forecast calling for good rains through the Midwest over the weekend, conditions are likely to improve.
• 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.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower for the fourth consecutive day, as improved Brazilian weather forecasts heavily impact the soy complex. Both soybean meal and oil were lower today, but bean oil posted the largest losses due to lower palm and crude oil.
• Global shipping problems have contributed to the pressure on soybeans, along with the rest of the grain complex, as the lack of movement and rising costs affect margins. Two main railways leading into Mexico are currently closed at Eagle Pass and El Paso, many shipping routes in the Red Sea are suspended due to rebel attacks, and shipping through the Panama Canal is also restricted due to low water levels.
• In Argentina, violent protests have broken out as citizens voice their frustration with the new government policies, especially those related to increased export taxes. Producers were anticipating friendly export policy from the new president, but instead were met with increased taxes on their grains.
• Today’s export sales report showed 73 mb of soybeans exported last week for 23/24 and 5 mb for 24/25, which was in line with analyst expectations. China and unknown destinations accounted for 54 mb of those exports. Sales for soybean meal were 148k tons and below analyst expectations.

WHEAT HIGHLIGHTS:

• Wheat had a mixed close, with Chicago contracts staying just above water, but a lower close in Kansas City and Minneapolis futures. Some support is stemming from a lower US Dollar Index today, which is forming a bearish pennant chart pattern. The formation of this pattern would signal more downside for the dollar, which, in theory, should make US exports more attractive and boost global business.
• On a bearish note, Russia continues to be the world’s wheat export leader, with FOB values cheaper than other origins, around $260 to $265 per mt. They recently fulfilled tenders by Egypt and Saudi Arabia and are likely to continue to get much of the world export business.
• Weekly US wheat export sales at 11.9 mb for 23/24 were a bit disappointing, and shipments last week at 12.4 mb are behind the weekly pace of 16.7 mb needed to reach the USDA’s export goal of 725 mb. Currently, wheat commitments are down 3% from last year at 546 mb.
• Over the holiday weekend, the US Plains should see mostly warmer temperatures. Additionally, the southern Plains have more chances for rain over the next seven days or so. This rain may add pressure to the market, with soil moisture conditions looking a lot more optimal than last year.
• SovEcon has increased their estimate of the Russian 2024 wheat harvest to 91.3 mmt, which is up 1.5 mmt from the previous projection. Favorable weather was cited as the reason for the increase, with conditions looking promising in winter wheat regions.
• According to Argus Media, the French soft wheat area for the 2024 harvest will hit the lowest level since the year 2000 at 4.238 million hectares. This comes after several weeks of heavy rain and is said to be based on feedback from over 1,200 farmers. Many areas of France are said to have received nearly 14 inches of rain from mid-October to mid-December, with higher totals in some regions.

DAIRY HIGHLIGHTS:

• Spot cheese was down 2.75 cents today to close at $1.3925/lb, its lowest close since July 7th of this year. Spot whey was lower for its third straight day with a $0.3725/lb close.
• This had Class III futures under pressure as well with double-digit losses in the nearby. The second month January contract now sits at $15.44.
• Class IV spot trade was slightly lower with spot butter giving back a half cent while powder dropped a quarter cent.
• Milk futures for Class IV were mixed, but buyers took the February contract 24 cents higher on 9 total trades.

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Author

Brandon Doherty