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:

• March corn futures saw both sides of unchanged on relatively light volume in today’s session before settling near the day’s lows, as traders continue to square positions ahead of the year-end. With Brazilian weather forecasts turning more favorable, the corn market may need a boost in export demand or some other supply concern to turn prices back higher.
• Ethanol average daily production for the week ending December 22 averaged 1.107 million barrels. This was above trade estimates and the highest since 2017. Ethanol stocks also rose to 23.517 million barrels, an increase of 611,000 from last week and the highest since 2021.
• Refinitiv Commodities Research (RCR) released its latest estimate of the 23/24 Brazilian corn crop at 118 mmt, which is down about 1% from its last estimate and from the USDA’s current 129 mmt estimate. They cite planting delays of the first corn crop and soybean crop and unfavorable weather conditions. These delays will ultimately delay planting and hurt yields of the safrinha crop, which accounts for 75% of Brazil’s production.
• There were reports of a Panama-flagged ship hitting a Russian mine in the Black Sea as it was heading to a Danube River port to load grain. According to the Reuters article, two individuals were injured in the attack.
• The USDA will release weekly export sales on Friday morning. Expectations for new sales last week to range from 600,000 to 1,400,000 mt for the week.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower in a day of mixed trade that was caused by volatility from thinly traded markets. While prices were higher earlier this morning, soybeans and both soybean meal and oil slipped later in the day on news of rainfall in Brazil, along with a more favorable forecast.
• The last regular trading day for January soybeans was today, as the delivery period will begin tomorrow. For the month, January beans are set to lose around 37 cents depending on tomorrow’s close. Both January meal and oil are set to have losses on the month as well.
• Central and northern Brazil received heavy scattered showers throughout the day, but temperatures are forecast to be warmer in the short term. January is expected to be wet for the driest parts of central and northern Brazil, and the forecast for Argentina remains favorable.
• Next month on the 12th, the USDA will release its January WASDE report, and changes will very likely be made to South American production. Their latest guess for Brazil was at 161 mmt, but many analysts are expecting closer to 155 mmt. The last guess for Argentina was 48 mmt, but that number may rise. For changes in the US, many analysts are expecting the USDA to decrease the export sales number, which would increase the carryout.

WHEAT HIGHLIGHTS:

• Breaking news indicated that a vessel in the Black Sea struck a Russian mine. Two people were reported to be injured. The civilian ship was headed to the Danube River to be loaded with grain and this may have factored some more premium into wheat today, with a higher close in all three futures classes.
• The US dollar made a new near-term low today at 100.61, before finding some support and heading back into positive territory. From a big picture perspective, the trend is still down, but should be watched closely as today’s reversal may be a signal that a bottom is forming. If it begins to rally, it could offer resistance to the wheat market.
• The increase in freight costs is not only affecting the US. Russia, despite their cheap wheat export prices, is seeing weaker shipments as well.  According to SovEcon, Russian 23/24 wheat exports are now estimated to be 48.6 mmt versus 48.8 mmt previously. Their November wheat exports at 3.5 mmt, down from last year’s 4.3 mmt.
• It is possible that with funds still net short a hefty number of wheat contracts, a short covering rally could be triggered by the recent buying interest in the wheat market. The holidays tend to be a choppy time for the markets with lower trade volume. While Chicago wheat is technically neither overbought nor oversold, momentum indicators are pointing higher for the time being.

DAIRY HIGHLIGHTS:

• Spot cheese fell 1.25 cents today with both blocks and barrels closing at $1.43/lb. Entering Friday on the shortened week, the average is up 3.875 cents.
• This had Class III reversing lower after two days of gains with the January contract down 29 cents while February fell 20.
• Class IV action was missed but characterized by gains in the mid-2024 contracts. Second month January was unchanged at $19.10.
• Spot butter was 3.75 cents higher for a total of 12 cents so far on the week, closing at $2.66/lb. Spot powder was unchanged today.

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

Amanda Brill