Weekly Market Update 12-12-24

Here is your weekly market update from the Garden City Co-op Grain Origination Team.

Trivia

1.  What are the two most popular names for Santa Claus?

2. Which state in the U.S. was the first to declare Christmas as an official holiday?

Answers at the bottom.

Market News

MARKET UPDATE: Overall, markets feel content to stay steady and rangebound as we slide into the end of the year and see what plays out with a new administration in the White House. Here are some by-commodity comments. Corn: While not a factor that directly affects our local markets, corn exports have been on a strong pace to end the year, with Mexico as a large part of that equation. This is providing some support to futures levels.  However, South America continues to see favorable conditions which reinforces the possibility of a HUGE crop and will hold a lid on what the market can do. With a lack of other big fundamentals to watch, the market will keep a close eye on South American weather. Local end user bids have been weaker in the last couple of weeks which is pressuring basis. Milo: Milo export demand is virtually non-existent; milo exports are 22% below the pace needed to hit current USDA export estimates. There are still a lot of question marks around tariffs under the new administration, so for now the Chinese remain content to sit on the sidelines for the near future. This has forced milo to find its way into local ethanol and feed markets, which has really weakened the market and put pressure on basis. Wheat: Wheat honestly just isn’t much fun. Kansas has a strong start to next year’s crop, while Argentina and Australia are also looking good. There are still concerns about Russian production and exports, but the market seems content to let that story play out. HRW exports aren’t very exciting, and domestic mills seemed checked out of buying for the near term.
 

EXPORT INSPECTIONS: Falling 2.6 million bushels below inspected values last week, wheat inspections for exports totaled 8.3 million bushels this week; data reporting of that 8.3 million bushels, 1.6 million bushels are set for exports to Mexico and 0.7 million bushels to Taiwan. Corn export inspections remain strong this week, with 41.3 million bushels reported total. Total corn inspections are now 5% above the year-to-date inspections relative to the seasonal pace needed to reach USDA’s target values. A total of 59.6 million bushels of soybeans were inspected for exports this week. Of the total 59.6 million bushels inspected, 31.1 million bushels are destined for export markets in China, followed by 5.2 million bushels set for Italy, 3.5 million bushels to Mexico, and 1.9 million bushels to Egypt. Milo exports decreased this week to 2.9 million bushels total; 0.8 million bushels below the USDA’s running 10-week average value.


EXPORT SALES: Old crop corn sales took a significant decrease this week compared to last week, at 37.3 million bushels and no N/C corn sales were reported. Corn sales once again fall below the running 10-week average for corn sales at 76.6 million bushels on average. Corn remains 8% above the marketing year-to-date sales relative to the seasonal pace needed to reach USDA targets. Soybean sales this week totaled 43.1 million bushels, with no N/C sales reported. Old crop wheat sales totaled 10.7 million bushels sold this week and no N/C sales were reported. Milo sales totaled 0.2 million bushels of O/C grain sold this week, once again, no N/C milo sales were reported; total sales falling 1.9 million bushels below the running 10-week average calculated at 2.1 million bushels.


WASDE RECAP: This WASDE report is typically quiet at this time, but significant updates regarding key balance sheets were made on Tuesday for the December report. The USDA has increased U.S. corn exports by 150 million bushels and raised ethanol corn usage by an additional 50 million bushels, which has resulted in a reduction of 200 million bushels in ending stocks. While both adjustments can be justified, the USDA tends to implement such changes more gradually. This is especially true for the increase in exports, as a more gradual approach would provide time to ensure that demand is not simply a result of front-loaded buying at multi-year high prices. Additionally, the USDA has increased Brazil's domestic corn usage by nearly 80 million bushels, contributing to a global stock decrease of more than 300 million bushels. As a result, U.S. corn stocks have fallen by 200 million bushels. However, the USDA did not change its estimated marketing year average cash price for corn, keeping it at $4.10 per bushel. In contrast, there were no adjustments made to the U.S. soybean balance sheet; however, the USDA reduced the marketing year average cash price for soybeans by 60 cents, bringing it down to $10.20 per bushel, which represents a decrease of $4 per bushel over the past two years. The USDA left Brazil's production unchanged at 169 million metric tons and is waiting to observe the weather patterns for December and January. Meanwhile, Argentina saw a 1 million metric ton increase in production, bringing it to 52 million metric tons.  Wheat experienced a slight surprise as imports rose by 4 million, totaling 125 million. However, exports also increased by 25 million, reaching 850 million. The net effect is a reduction of 21 million in carryout stocks, which are now pegged at 794 million for all U.S. wheat. White wheat led the charge with an additional 15 million in exports, while HRS and SRW saw an increase of 5 million. HRW continues to struggle to find buyers.





WEATHER: An uneventful week for the weather, with thankfully a few warmer days thrown into the mix. Today is sunny with a high of 44°F; winds blowing out of the east at 6 to 9 mph. Mostly cloudy skies predicted overnight with a low temperature around 20°F and continued winds out of the east at 7 to 9 mph. Friday’s forecast is mostly sunny with a high temperature of 47°F and lows falling to the mid-20s throughout the evening. Saturday is sunny with a high of 57°F; west/northwest winds at 6 to 10 mph, becoming southwest later in the afternoon. Overnight, skies are mostly clear with a low temperature around 29°F. Moving into the Sunday forecast, skies are again mostly sunny with a high temperature of 61°F with temperatures falling to around 31°F overnight. Early next week, your Monday, Tuesday, and Wednesday forecast looks clear, with sunny skies and temperatures ranging from the upper-40s to low-50s. Overnight temperatures make their way to the low- to mid-20s and stay partly cloudy.

Trivia Answers

1. Kris Kringle and Saint Nick

2. Oklahoma