Grain Markets and Other Stuff

Joe's Premium Subscription: www.standardgrain.comGrain Markets and Other Stuff Links-Apple PodcastsSpotifyTikTokYouTubeFutures and options trading involves risk of loss and is not suitable for everyone.0:00 National Emergency and Tariffs2:57 USDA Preview6:45 Argentina Rains Expected8:01 Brazil Update9:33 Ethanol Production is Strong10:31 Flash Sale📈 US Dollar and Bond Yields Rise Amid Economic Concerns 💵The US dollar and bond yields continued their upward trend on Wednesday 📈. The 10-year US Treasury note yield rose to 4.73%, its highest level since April, while the dollar index increased 0.28% to 109.00, slightly below last week's two-year high of 109.54 📊. The rise in the dollar and yields followed a CNN report suggesting that Donald Trump might declare a national economic emergency to push forward his broad tariff policies.🌾 USDA's Crop Report and Grain Stocks Release on Friday 📅The USDA will release its monthly Crop Production and WASDE reports on Friday 📊. Analysts expect a small reduction in the size of the 2024 US corn and soybean crops, which could lead to reduced carryout projections if realized 🌽🌱. US corn stocks as of December 1st are expected to be down less than 1% year-on-year, while soybean stocks are forecast to be up about 8% and wheat stocks up about 10% 🌾. 🌧️ Argentina Forecasted to Receive Rainfall 🌦️Argentina is expected to receive substantial rainfall over the next couple of weeks 🌧️. The Buenos Aires Grains Exchange predicts that Argentina's key farming region will receive 2 to 3 inches of rain in mid-January 🌧️. This comes after dry conditions linked to La Niña have begun to impact crops. Water reserves in major farming areas have been at critical levels following below-normal rainfall in December. The forecasted rainfall will help crops reach February, when rainfall typically resumes 🌱.🌞 Dry Conditions Affecting Soybean Crops in Brazil 🇧🇷Dry conditions are starting to impact soybean crops in southern Brazil 🌞. Parts of Rio Grande do Sul, Brazil's southernmost state, have gone 15 to 20 days without significant rainfall 🌾. The state's northwestern region is expected to remain dry for another 12 to 15 days, though the situation is not yet critical 🚨. Meteorologists expect more consistent rainfall by late January, with frequent rains continuing through February, which could improve the crop situation 🌧️. Meanwhile, Central Brazil is forecast to receive heavy rainfall, which may interfere with the early soybean harvest 🌱.⛽ US Ethanol Production Declines Slightly 📉US ethanol production decreased last week for the first time in a month 📉. Weekly output dropped by 1% to 1.1 million barrels per day, though it was still 5.1% higher compared to the same week last year 🌽. Ethanol stocks increased by 2.2% compared to the prior week and were up 2.4% from the same week in 2023 📊. Meanwhile, implied gasoline demand was up 3.8% from the previous week but down 5.9% from the same week last year 🚗. Over the last four weeks, implied US gasoline demand is down slightly compared to last year 📉.

Joe's Premium Subscription: www.standardgrain.comGrain Markets and Other Stuff Links-Apple PodcastsSpotifyTikTokYouTubeFutures and options trading involves risk of loss and is not suitable for everyone.0:00 Re-Inflation and Grain Prices4:15 Argentina7:46 Farmer Sentiment9:29 Ethanol Exports Spike11:12 Ag Startup Valuation12:11 Corn FlashStock Market Tumbles Amid Inflation ConcernsThe stock market took a hit on Tuesday with the Dow Jones dropping 0.4%, the S&P 500 declining 1.1%, and the Nasdaq falling 1.9%. The continued resilience of the economy has pushed back expectations for when the Federal Reserve will begin cutting interest rates this year. Additionally, concerns are rising that President-elect Donald Trump's tariff plans could lead to inflationary pressures.USDA Optimistic About Argentina’s Soybean CropUSDA's Argentina office is maintaining a positive outlook for the country’s soybean crop. The crop forecast remains steady at 52 million metric tons (mmt), with an increase in soybean acres and ideal growing conditions contributing to this stable projection. La Niña conditions may pose a risk to yields, but record-high soybean crush of 42 mmt is expected, driven by strong exports and consistent crush rates. US Farmer Sentiment Declines Slightly in DecemberUS farmer sentiment dropped slightly in December, with the Purdue CME Group Ag Economy Barometer Index falling to 136, a 9-point decline from November. Despite this, the index remains at its highest level since August 2021. The slight dip is attributed to farmers' concerns about farm conditions and the agriculture industry, but they remain optimistic about the future, particularly after the presidential election. The potential for a trade war under Trump's administration is a rising concern, with 48% of farmers now believing a trade war is either likely or very likely, up from 42% in November.US Ethanol Exports Surge in NovemberUS ethanol exports saw a major boost in November, climbing to 187.6 million gallons, a 31% increase from October. 2024 exports are on track to surpass 1.9 billion gallons, which would represent 12% of US ethanol production and set a new record. The surge is largely driven by strong growth in key markets like Canada, India, and the European Union. While exports of dried distillers grains fell 15% in November, they were still 14% higher than the same time last year.Inari Agriculture’s Valuation SoarsInari Agriculture, an agtech startup, has seen its valuation skyrocket in 2024. The company raised $144 million in new funding, increasing its valuation by 32% to $2.17 billion. Inari develops wheat, corn, and soybeans that require less fertilizer, water, and land, providing sustainable solutions for farmers. The additional funding will help Inari expand its innovative solutions and strengthen its position in the agriculture tech space.USDA Reports Flash Sale of CornThe USDA reported a flash sale of 110,000 metric tons (4 million bushels) of corn to Colombia for delivery during the 2024/2025 marketing year.

Joe's Premium Subscription: www.standardgrain.comGrain Markets and Other Stuff Links-Apple PodcastsSpotifyTikTokYouTubeFutures and options trading involves risk of loss and is not suitable for everyone.0:00 Analysts are Bearish Soybeans2:56 Trump Tariff Talk4:25 The Funds7:41 South American Weather9:34 Grain Shipments10:38 Bird FluAnalysts Warn Soybeans Could Fall Below $9 Amid US/China Trade TensionsRabobank analysts warn that soybean prices could drop below $9 per bushel if a new US/China trade war erupts. They believe that China would retaliate with its own tariffs on US grains and oilseeds if President-elect Donald Trump proceeds with his aggressive tariff plan. This could give Brazil an even stronger position in the Chinese market, as they would likely benefit from reduced US soybean exports. Trump Denies Softening Stance on TariffsPresident-elect Trump denied claims that he might adopt a softer approach to tariffs. On Monday, Trump dismissed a Washington Post article suggesting that his tariff plan might focus only on sectors critical to national security. This would have been a significant shift from the tariffs he promised during his presidential campaign.Funds Increase Net-Long Position in CornThe Funds have substantially increased their net-long position in corn futures. According to CFTC’s weekly Commitment of Traders data, as of Tuesday, December 31, large money managers were net buyers of 58,000 corn contracts. Funds were also net buyers of 29,000 soybean contracts and 12,000 SRW wheat contracts during the week.Weather Relief for Brazil and ArgentinaExtended weather forecasts provide some relief for portions of southern Brazil and northern Argentina, which have been experiencing dry conditions. Both the Euro and GFS models agree that these regions will remain mostly dry through the next 10 days. However, rain chances are expected to return during the 10-16 day period, with some normal rainfall possible between 15-28 days. This has impacted soybean meal futures, which closed lower on Monday and continued trading lower early this morning.US Export Shipments in Line with ExpectationsUS corn shipments were in line with expectations last week, with 847,463 metric tons (33 million bushels) inspected for export. However, this was 6.6% lower compared to the previous week and 22% below the same week last year. Soybean shipments came in at 1.3 million metric tons (47 million bushels), down 22% from the prior week but up 23% compared to last year. Wheat shipments exceeded expectations at 412,342 metric tons (15 million bushels), up 22% from the previous week but down 18% from last year.First US Human Fatality from Bird Flu ConfirmedThe US has confirmed its first human fatality from bird flu, a case involving an individual with underlying health conditions over the age of 65 in Louisiana. There have been 61 human bird flu cases nationwide. The majority of cases have occurred among farmworkers in California and Washington who had contact with infected poultry or dairy cows.

Joe's Premium Subscription: www.standardgrain.comGrain Markets and Other Stuff Links-Apple PodcastsSpotifyTikTokYouTubeFutures and options trading involves risk of loss and is not suitable for everyone.🌞 Argentina's Hot and Dry Weather Impacting Crops 🌱Hot and dry conditions in Argentina are starting to take a toll on the corn and soybean crops 🌾. While both crops experienced ideal growing conditions during spring thanks to abundant rainfall, high temperatures and reduced rainfall at the end of December are now affecting their development ☀️. The Rosario Grains Exchange reported that some areas received only 30% of their average rainfall in December 🌧️. Despite these challenges, the Buenos Aires Grains Exchange stated that the crops are still progressing well due to moisture earlier in 2024. However, Argentina is expected to remain hot and dry over the next two weeks, which could further stress crops 🌞.🇨🇳 China Adds US Companies to Export Control List 🔒China has added 28 US companies to its export control list, preventing them from exporting dual-use items (products that can be used for both civilian and military purposes) to China 📉. The exact enforcement details and which products will be classified as dual-use remain unclear 🔍. Additionally, China imposed sanctions on 10 defense firms related to military sales to Taiwan 🇹🇼. These sanctions are expected to have little impact as US military companies do not sell arms or related goods to China 💡. These actions are seen as a response to the anticipated tougher US policies against China under President-elect Donald Trump 🤔.💵 US Dollar Index Hits Two-Year High 📈The US dollar index reached its highest level in over two years last week, rising 0.8% against a basket of currencies as the new trading year began 📊. The strength in the dollar is attributed to investor optimism about Donald Trump’s return to the White House, as they expect lower taxes and deregulation to boost economic growth, consumer spending, and business investment 💰. However, analysts caution that the US dollar could face a correction, with only two quarter-point rate cuts expected this year and the potential for negative US economic data 📉.📉 US Export Sales Disappoint in Latest Report 🌽US export sales were underwhelming last week, with net corn sales falling below expectations at 777,000 metric tons (31 million bushels) 🌽, a 55% decrease compared to the previous week and 44% below the 4-week average 📊. Mexico was the largest corn buyer for the week 🇲🇽. Net soybean sales also fell short of expectations, declining to a marketing year low of 484,700 metric tons (18 million bushels) 🌱, a 51% drop from the previous week and 67% lower than the 4-week average 📉. China was the largest soybean buyer 🇨🇳. Net wheat sales also missed expectations, coming in at 140,600 metric tons (5 million bushels) 🌾, down 77% from the previous week and 68% from the 4-week average 📉.⚡ US Renewable Diesel and Biofuel Production Up in October 🔋US renewable diesel and biofuel production increased in October, with renewable diesel producers using 77% of their capacity, the highest since July 🌱. Biodiesel producers utilized 89% of their capacity, marking the highest level since June 2023 🔋. The increase in production is attributed to improved margins, which were boosted by higher tax credit values and stronger demand 🚗.