Weekly Market Update 1-18-24

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

Trivia

1. Who named the Pacific Ocean?

2. What is the rarest M&M color?

Answers at the bottom.

Market News

Shipping in the Red Sea, causing unrest. These attacks have highlighted the significant risk of a supply chain crisis as vessels navigate this crucial trade route. The US and UK have extended their assistance to combat the Houthi militants. However, the attacks have resulted in a sharp decline in shipments through the waterway, which typically handles about 12% of global seaborne trade. Dirk Siebels, senior analyst at Risk Intelligence, said that up until the airstrikes, the Houthis had been sticking to targets that were connected to Israel. Since those strikes, the Houthis say they are targeting US and UK vessels too, and since Trouble in the Red Sea. The shipping industry has recently faced a series of attacks on merchant Friday, two of the three ships that were hit were US-owned. The recent attacks have affected the crews' nerves, disrupted transits, and caused volatility in the freight markets. This can harm the global economy, and we'll have to wait for the full impact. These vessels carry a variety of goods, such as oil, gas, grains, and manufactured goods, and have been increasingly diverted to longer routes, resulting in delayed estimated arrival times.
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Export Inspections

This week's corn flash sales to Mexico and a mediocre report of corn bushels inspected totaled 34.5 million bushels. This was down from last week's report but fell within the estimated range. The top three destinations for corn were Mexico, Japan, and China. Unfortunately, this is not enough to make a significant difference in the corn market. Soybeans inspected numbers were higher at 46.5 million bushels than the prior week's total. Milo reported 11.7 million bushels, with China being the largest receiver. Wheat is not doing well, with only 8.6 million bushels, which is on the lower side of the estimates and quieter than in previous weeks. Mexico is the largest destination, with 20 weeks left, but it is still below the pace required by the USDA. Due to this week’s holiday, we won’t report on export sales.


Panama Drought continues

The ongoing drought in the area is a key contributor to the problem. Despite the end of the rainy season, the water levels in the canal have not sufficiently recovered. As a result, the canal's authority has put restrictions on daily transit and vessel draft in place, and they will continue throughout 2024 There are growing concerns about global trade because of issues with the Panama Canal. These restrictions were imposed earlier last year to reduce the number of ships and weight restrictions. This has resulted in troubled global trade and higher freight costs since the Panama Canal is a crucial waterway. To address this issue, the Panama Canal Authority has increased the number of transit slots to 24 daily this month, after reducing the number of vessel transits to 18 in February. However, this is still far below the daily transits of 36 that were usual before the restrictions were put in place.

Weather

This week's weather is finally turning warmer, with higher temperatures and an end to the chilly lows. However, we will experience a cold front tonight, bringing a winter weekend with temperatures in the 30s. But don't worry, the cold spell won't last long - next week we can expect highs in the upper 40s and lows in the 20s and 30s, also a chance of some moisture and the end of next week. Expect winds throughout today and Saturday.

Trivia Answers

1. Ferdinand Magellan

2. Brown