Grain Markets and Other Stuff

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🚂🌽 The Biden administration is facing pressure from agricultural groups and politicians to reopen the US-Mexico railroad crossings that were closed due to an influx of migrants. Operations are expected to return to normal by January, according to a Mexican official.

🌧️ Rainfall has hit key Brazilian soybean areas, providing relief to some regions with moisture deficits. However, the dry period is expected to return early next week before more rain is forecasted around January 2nd.

🌽🚢 Brazil has become China's top corn supplier, supplying 90% of China's corn imports in November. Brazil's corn exports to China have surged this year, while US corn imports by China have been lower due to various factors, including drought-related shipping disruptions.

📉 US ethanol production declined slightly last week, with ethanol stocks increasing. Implied gasoline demand was down compared to the previous week but remains higher than the same period last year.

🚢🛢️ Despite rising tensions in the Red Sea, energy markets have remained relatively stable. Naval deployments in the region aim to deter further Houthi attacks, but experts believe the disruptions will be temporary, and shipping companies will return to using the Suez Canal.

⛽ Gasoline prices have seen an increase, posting their largest one-day gain since August due to Red Sea disruptions. Gasoline prices are expected to trend higher as oil prices remain strong amid the disruptions.

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🌽📉 The nearby Mar24 corn contract reached a life-of-contract low close on Tuesday, closing just below $4.73 per bushel after a 4-cent drop. Logistics issues at the US/Mexico border, Panama Canal, and Red Sea, coupled with a record 2023 US harvest, are contributing factors. Farmers are considered "undersold" compared to a typical year.

🚂🌽 Mexico is facing potential shortages of corn and soybean meal due to this week's rail closures. Mexico's farm lobby, CNA, emphasized the importance of goods and inputs for livestock and industrial uses, estimating less than 9 days' supply of soybean meal and 8 to 20 days' supply of corn. Union Pacific estimates a daily economic impact of $200 million. Mexico accounts for 47% of all US corn export sales this year.

🇧🇷🌱 Poor growing conditions are expected to impact Brazilian soybean production, particularly in Mato Grosso, with a 20% reduction expected compared to last season, according to Aprosoja. USDA and CONAB have also reduced their estimates for Brazil's soybean production, which began the season with higher expectations.

🌽🚗 The EPA has requested White House approval for a rule allowing year-round sales of E15 in select Midwestern states, including Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin. The proposal has faced opposition from the oil industry, citing potential supply chain issues and higher gasoline prices.

💰💼 Ukrainian aid has been postponed until 2024, as Senate Majority Leader Chuck Schumer announced. The aid package has been delayed due to Republican demands for immigration policy changes to be included. The Pentagon warns that funds needed to replace weapons sent to Ukraine will run out by December 30.

If you have any more questions or need further information, feel free to ask! 🚢🌎🛤️📊🇺🇦

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0:00 Intro + Mexico Rail Shutdown
2:58 Reduced Brazil Corn Acreage?
5:52 Red Sea Attacks
7:18 Export Shipments
8:18 Goldman Stock Market Target
9:44 Cattle and Outside Markets

🚂🇺🇸🇲🇽 US-Mexico railroad border crossings temporarily closed due to migrant surge, impacting supply chains for essential commodities like grain, industrial products, and cars.

🌽🇧🇷 Brazilian farmers delay fertilizer purchases for the second corn crop due to drought and soybean planting delays, affecting crop production.

🌱🚢 US soybean shipments improved with 1.4 million metric tons (52 million bushels) inspected for export, showing a +41% increase compared to the previous week but a -28% decrease versus the same week last year. Corn shipments also increased by 31%, totaling 947,418 metric tons (37 million bushels), while wheat shipments decreased by 10%, with 284,792 metric tons (10 million bushels) reported.

📈📊 Goldman Sachs has raised its 2024 forecast for the S&P 500, projecting it to reach 5,100 next year, up from the previous target of 4,700. The S&P 500, currently at 4,740, is just 1.2% below its January 2022 high. The market has seen significant gains since late October, primarily driven by expectations of rate cuts in 2024, with the Fed announcing plans for a 0.75% reduction, while the market anticipates a larger cut of 1.5%.

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USDA Foreign Holdings of US Ag Land Report:
https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/EPAS/PDF/2022_afida_annual_report_12_14_23.pdf

🚜 Foreign-Owned US Farmland Surges in 2022:
US farm acres owned by foreign entities grew by more than 8% last year to 43.4 million acres. Canada remains the largest foreign investor, accounting for 32% of foreign-owned acres, while China owns less than 1% of US agricultural land at 350,000 acres. Since 2017, purchases of US farmland by foreign entities have been increasing, averaging over 3 million acres per year. 🇨🇦🇨🇳🏞️

🌱 NOPA Releases November Crush Data:
The National Oilseed Processors Association (NOPA) reported that its members processed 189.038 million bushels of soybeans in November, the second-largest crush for any month on record. End-of-month soybean oil stocks in November rose for the first time in seven months, reaching 1.214 billion pounds, the highest end-of-month oil supply since August. 🌿📈🌽

🌧️ Rain Returning to Brazil:
Rainfall is expected to return to Brazil this week, providing much-needed relief to central and northern areas that have been experiencing substantial moisture deficits. Daily rainfall is anticipated to continue at least through Saturday. 🇧🇷🌧️🌱

🌽 Biden Administration Provides Win for Ethanol with SAF Tax Credits:
President Joe Biden's administration announced recognition of the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model for companies seeking tax credits from Sustainable Aviation Fuel (SAF). The model paves the way for corn-based ethanol to qualify for SAF tax credits, offering growth opportunities for ethanol producers and farmers. The administration plans to update the methodology by March 1, potentially impacting SAF feedstock requirements. 🌽✈️💳

💼 Large Money Managers Trim Net Short Position in Corn:
In the week ending December 12, "the funds" reduced their net short position in the corn market by 7,000 contracts. Funds were net sellers of 6,000 contracts of soybeans but net buyers of 29,000 contracts of Soft Red Winter (SRW) wheat. 📊🌽🌾

📊 USDA Reports Flash Sales of Soybeans:
On Friday, US exporters reported flash sales of 134,000 metric tons (5 million bushels) of soybeans to China and 447,500 metric tons (16 million bushels) of soybeans to unknown destinations for delivery during the current marketing year. However, the US soybean export book remains 20% below the same period last year. 🚢🌱📉

Stay updated with the latest agricultural news and developments! 🌾🌍📰 #Farmland #SoybeanCrush #BrazilRains #Ethanol #Corn #SoybeanSales 🚜🌧️📈🌽✈️📊

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Brazilian Soybean Areas Facing Dry Conditions:
Key Brazilian soybean areas are expected to remain mostly dry through the weekend, leading to crop stress due to abnormally warm temperatures and a lack of rainfall. Rain is forecast to return by Tuesday next week, with central and northern areas expected to receive better amounts through Christmas. The extended Global Forecast System (GFS) suggests additional rainfall for some areas by year-end but may not be reliable.

Ethanol Producers Awaiting SAF Credit Approval:
Ethanol producers are anticipating a victory with Sustainable Aviation Fuel (SAF) tax credits. The Biden administration is expected to approve the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model, allowing ethanol-based SAF to qualify for tax credits. However, the administration is also expected to update the GREET methodology by March 1, potentially impacting the use of corn-based ethanol in SAF. Regulations around SAF feedstocks are expected to tighten.

Record-High Electric Vehicle (EV) Inventories:
US EV inventories on dealer lots have doubled compared to a year ago, resulting in a 114-day supply. Consumers have been deterred from EVs due to their high cost and inadequate charging infrastructure. Major automakers like Ford and GM are reducing production of some EV models. A group of US auto dealers has requested the Biden administration to reduce EV mandates because of the large inventories.

Rainfall in Kansas, Oklahoma, and Texas:
Rainfall moved over Kansas, Oklahoma, and Texas recently, with up to 2.5 inches recorded in parts of the Texas panhandle and northward regions. This rainfall is much needed, as many areas have been experiencing drought conditions to varying degrees. Kansas rated the winter wheat crop at 39% good to excellent in its final crop progress report for the year.

Declining Mortgage Rates:
Mortgage rates in the US have declined for seven consecutive weeks, with the average 30-year mortgage rate falling to 6.95%, the lowest since August. Rates peaked in October at 7.8%. The Fed's forecast of rate cuts in 2024 is expected to push mortgage rates near or below 6%. Lower rates are expected to boost home sales, which have slowed significantly due to rising rates.

US Grain Export Sales:
US corn export sales improved last week, with net sales of 1.4 million metric tons (56 million bushels), up 10% from the previous week. Net soybean sales of 1.1 million metric tons (40 million bushels) were down 23% from the previous week. Net wheat sales were strong, totaling 1.5 million metric tons (55 million bushels), a marketing year high.

Flash Sale of Soybeans Reported by USDA:
US exporters reported a flash sale of 400,000 metric tons (15 million bushels) of soybeans to unknown destinations for delivery during the current marketing year. However, the US soybean export book continues to lag behind the same period last year by 20%.

Stay tuned for more updates on these and other market developments! 🌽🚜📉 #SoybeanAreas #EthanolProducers #Elect

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🏦📉 Market Update - Fed Rate Decision, PPI Data, South American Weather, Argentina Export Taxes, Ethanol Production, and More 🇺🇸🌽🌦️

🏦 Fed Rate Decision - Rates Held Steady:
The Federal Reserve announced its decision to keep interest rates unchanged on Wednesday. It also signaled at least three rate cuts in 2024, totaling 0.75%. The markets are anticipating more significant rate cuts, with expectations of a 1.5% reduction next year. Following the announcement, stock markets, including the Dow Jones, S&P 500, and Nasdaq, gained 1.4%, with the Dow Jones surpassing 37,000 for the first time.

📊 November PPI Data:
The November Producer Price Index (PPI) revealed that the economy is still cooling. Wholesale prices remained unchanged on a monthly basis, up from a 0.4% decline in October. On an annual basis, prices increased by 0.9%, down from 1.2% in October and lower than the projected 1%. The report has fueled optimism that inflation will continue to decline, supporting expectations of Federal Reserve interest rate reductions in 2024.

🌦️ South American Weather Update:
Most Brazilian soybean areas are expected to remain dry for the next 5–6 days, benefiting production in southern areas but posing challenges for central and northern regions. Rainfall is forecast to return next week, with spotty coverage and variable amounts. Rainfall remains below normal seasonal levels.

🇦🇷 Argentina Export Taxes Proposal:
Argentina's new president, Javier Milei, has proposed an increase in export taxes on certain grains to 15%, excluding soy. Soybean exports are currently taxed at 33%, while wheat and corn exports are taxed at 12%. This proposal follows Argentina's recent currency devaluation and spending cuts.

🍃 US Ethanol Production:
US ethanol production declined slightly last week, with weekly output at 1.07 million barrels. Ethanol stocks increased to 22.1 million barrels, up 3.1% compared to the previous week but down 5% YoY. Implied gasoline demand saw a 4.6% increase compared to the previous week and 6% YoY.

🌱🚢 USDA Reports Flash Sale of Soybeans:
US exporters reported a flash sale of 125,000 metric tons (5 million bushels) of soybeans to unknown destinations for delivery during the current marketing year. The US soybean export book continues to lag behind last year, with a 16% deficit for the same period.

Stay tuned for more market developments and insights! #FedRateDecision #PPIData #SouthAmericanWeather #ArgentinaExportTaxes #EthanolProduction 🌐📊🌽🏦

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0:00 Intro + Argentina Currency Situation
3:04 Inflation Update
6:39 GE Testing SAF in Flights
7:44 More Brazil Crop Estimates
9:13 Flash Sale
9:59 Cattle Update

🌾📉 Market Update - Grain Markets Trade Lower, Argentina Currency Devaluation, Inflation Data, and More 🇦🇷💱

📉 Grain Markets Trade Lower:
Grain markets experienced a decline on Wednesday morning.

💱 Argentina Currency Devaluation:
Argentina announced a significant devaluation of its currency, the peso, by 50%, adjusting it to 800 to the US dollar from 400 previously. This move is part of measures to cut the fiscal deficit and address runaway inflation. The devaluation may make Argentina's agricultural products more attractive globally, and export taxes on certain products might be removed once the "economic emergency" concludes.

📈 Inflation Data - November CPI:
Inflation in November slightly cooled, increasing by 3.1% on an annual basis, down from 3.2% in October. On a monthly basis, inflation rose by 0.1%, slightly higher than anticipated. While inflation is gradually decreasing, it remains above the Fed's 2% target. The Fed is expected to maintain unchanged rates, but the uptick in monthly inflation may affect expectations regarding future rate cuts.

✈️ GE Aerospace Tests Sustainable Aviation Fuel (SAF):
GE Aerospace announced successful testing of ten airplane engine models using 100% SAF made from vegetable oils, waste oils, or fats. GE, a major player in the aviation industry, plans to conduct further extensive testing of SAF to assess its reliability and longevity. US airlines, including American, Delta, and United, have committed to achieving net-zero carbon emissions by 2050.

🌱 Brazil's Soybean Crop Forecast Update:
The Brazilian Association of Vegetable Oil Industries (Abiove) has revised its estimate for Brazil's soybean crop, lowering it by nearly 3 million tons to 161.9 million tons. This follows previous reductions by the USDA and CONAB. Abiove also increased its estimates for Brazil's soybean exports to 100.2 million tons in 2024 and crushing to 54.5 million tons.

🌽🚢 USDA Reports Flash Sale of Soybeans:
US exporters reported a flash sale of 198,000 metric tons (7 million bushels) of soybeans to unknown destinations for delivery during the current marketing year. Since the start of December, exporters have sold a total of 1.05 million metric tons (39 million bushels) of soybeans through seven flash sales.

Stay tuned for market developments and insights! #GrainMarkets #ArgentinaDevaluation #InflationData #SAFTesting

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🌱🌐 Agricultural and Economic Highlights: Oversight of Fertilizer Companies, Brazil's Soybean Planting, Sustainable Aviation Fuel Guidance, and CPI Report Expectations 🌾💡

👥🏭 US Senators Call for Oversight of Fertilizer Companies:
US Senators Chuck Grassley and Tammy Baldwin are set to introduce legislation aimed at increasing transparency in fertilizer companies. The bill directs the USDA to investigate pricing transparency, imports, emerging technologies, concentration within the industry, and potential anticompetitive behaviors. The legislation aims to fit into next year's five-year farm bill reauthorization.

🇧🇷🌱 Brazil's Soybean Planting Progress and Crop Outlook:
Brazil's soybean planting, reported by AgRural, reached 91% completion, slightly behind last year's 95% at the same week. AgRural revised its forecast for this season's soybean crop to 159.1 million tons, down from 163.5 million tons, citing excessive heat and insufficient moisture. Additionally, south-central Brazil farmers have planted 95% of the first corn crop for the season.

🛢️🌿 Guidance on Sustainable Aviation Fuel Subsidies Expected:
The Treasury Department is expected to release guidelines on sustainable aviation fuel (SAF) subsidies. The guidance will clarify if SAF made from corn-based ethanol qualifies for subsidies. With increasing electric vehicle sales, the ethanol industry sees SAF as a key avenue for growth.

🚢🌾 US Soybean Shipments and Flash Sale:
US soybean shipments were lackluster last week, with 984,410 metric tons (36 million bushels) inspected for export, down 16% from the previous week and 48% compared to the same week last year. A flash sale of 132,000 metric tons (5 million bushels) of soybeans to unknown destinations for delivery during the current marketing year was reported.

💹📊 November Consumer Price Index (CPI) Report:
The November CPI report is anticipated to reveal stable monthly consumer prices for the second consecutive month. On an annual basis, inflation is forecast at 3.1%, slightly lower than October's 3.2%. The Federal Reserve, meeting this week, may consider maintaining rates if inflation remains steady or declines.

📈 Stay informed on agricultural, economic, and market developments! #FertilizerCompanies #BrazilSoybeanPlanting #AviationFuelGuidance #CPIReport 🌍🌾💰

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🌾📊 Agricultural Highlights: USDA Report, Fund Positions, Climate-Friendly Farming, and Ukrainian Aid Resistance 🌱🌐

🇺🇸🌾 USDA Report Insights:
Friday's USDA report brought limited changes, with increased estimates for US corn and wheat exports due to robust export sales. The US soybean balance sheet remained unchanged. Brazil's soybean production estimate was revised to 161 million metric tons (mmt) from the previous 163 mmt, while last year's crop saw a 2 mmt upward revision to 160 mmt. The Brazilian corn production estimate remained steady at 129 mmt. Argentina's corn and soybean crop estimates were unchanged.

📈🌽 Fund Positions in Corn Market:
Large money managers reduced their net short position in the corn market, according to the CFTC's weekly Commitment of Traders data. During the week ending December 5, "the funds" were net buyers of 55,000 contracts of corn and 24,000 contracts of SRW wheat. However, funds were net sellers of 33,000 contracts of soybeans.

🌍🤝 US-UAE Collaboration for Climate-Friendly Farming:
The US and the United Arab Emirates are jointly promoting climate-friendly farming through the Agriculture Innovation Mission for Climate. With funding exceeding $17 billion, the initiative, established in 2021, focuses on expanding agricultural research, implementing sustainable farming practices, and reducing methane emissions. Partners include Google, Bunge, and The Nature Conservancy.

🇺🇦💰 Challenges in Ukrainian Aid Proposal:
Efforts to provide additional US aid to Ukraine face resistance, especially among Republicans. Support is waning, and Republicans are seeking modifications to immigration and border policies as a condition for funding. Democrats remain committed to open border policies and view funding for Ukraine as crucial to prevent potential catastrophic consequences.

🚢🌾 USDA Flash Sales to China and Unknown Destinations:
USDA reported flash sales, including 136,000 metric tons (5 million bushels) of soybeans to China, 110,000 metric tons (4 million bushels) of soft red winter wheat to China, and 165,000 metric tons (6 million bushels) of corn to unknown destinations, further highlighting global trade dynamics.

📊 Stay updated on the latest agricultural developments! #USDAreport #FundPositions #ClimateFarming #UkraineAid #USDAFlashSales 🌾🤝🌱

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🌾🌍 Agricultural Insights: Interest Rates and Emissions, Brazil's Crop Projections, USDA Reports, Argentine Soybeans, and US Export Sales 🌱📊

🏦 Rabobank's Emission-Linked Interest Rates:
Rabobank may increase interest rates for farmers and rural businesses if they fail to meet greenhouse gas emission targets. Offering sustainability-linked loans, the bank encourages clients to achieve specific emission goals, with successful efforts resulting in interest rate discounts. Rabobank believes most farmers can control emissions with the right tools.

🇧🇷 Brazil's Adjusted Crop Projections:
The Brazilian government, through CONAB, has reduced its soybean estimate to 160.2 million tons, citing unfavorable planting conditions. This adjustment, down from the previous projection of 162.4 million tons, still represents a 4% increase from the last season's crop. The corn estimate was also revised down to 118.5 million tons, a 10% decline from the previous season.

🌽🌱 USDA Crop Production and WASDE Reports Today:
The USDA is set to release its monthly Crop Production and WASDE reports, with expectations of minimal changes to US balance sheets. While adjustments for the 2023 US crop projections may be deferred until January, some activity regarding South America is anticipated, particularly in smaller production estimates for Brazilian corn and soybeans.

🌧️ Improved Soybean Conditions in Argentina:
Argentina's soybean conditions have improved with abundant rainfall, as reported by the Buenos Aires grain exchange. Approximately 98% of Argentina's soybean crop is in normal to excellent condition. The country has planted 52% of the expected 42.7 million soybean acres, with a forecasted crop reaching 50 million tons. Corn planting progress is also at 40% of the expected 42.7 million acres.

🌽🌾 US Export Sales Update:
US corn export sales declined last week, with net sales of 1.3 million metric tons (51 million bushels). Soybean sales were also down by 20%, totaling 1.5 million metric tons (56 million bushels), with China being the largest buyer. Wheat sales reached 356,400 metric tons (13 million bushels), with Taiwan as the largest buyer for the week. A flash sale of 121,000 metric tons (4 million bushels) of soybeans to unknown destinations was reported.

📈 Stay informed on the latest agricultural developments! #Rabobank #BrazilCropProjections #USDARports #ArgentinaSoybeans #USExportSales 🌾📊🌱