Ag Market View for Dec 10.24

CORN

Today’s USDA data was bullish for corn as US ending stocks were slashed 200 mil. bu. to 1.738 bil. 165 mil. below expectations.  Exports were increased 150 mil. bu. while usage for ethanol production was up 50 mil. I had the lowest corn ending stocks forecast in the Reuters survey of guesses at 1.863 bil. bu., down 75 mil. from Nov-24, which proved too high.  Global stocks fell nearly 8 mmt to 296.4 mmt, well below expectations, largely due to lower US supplies.  There were no changes to South American production however a big jump in ethanol usage in Brazil.  Overnight China lowered their 2024 corn production forecast 3.2 mmt to 293.4 mmt, due to excessive rain in key growing areas, still above the USDA forecast of 292 mmt.  Mch-25 corn traded to a fresh 2 month high while peaking at the top end of its $4.20-$4.50 range.  

QST Corn futures chart 12.10.24

SOYBEANS

Today’s USDA data was neutral for soybeans as US ending stocks held steady at 470 mil. bu. in line with our expectations.  Interesting to see the big month-to-month jump in bean oil yields as production was up 270 mil. lbs. to 28.605 bil. lbs. without an increase in crush.  The USDA kicked the biofuel usage est. for bean oil down the road a month by keeping consumption at 14.0 bil. lbs.  Global stocks were little changed at 131.9 mmt, slightly below expectations.  Argentine production increased 1 mmt to 52 mmt while Brazil was left unchanged at 169 mmt.  While weather conditions in SA are favorable, they aren’t perfect.  Too much rain in Southern Brazil, particularly Parana has led to isolated flooding.  Conditions are expected to dry out over the next few days ahead of the next rain event this coming weekend which will induce additional flooding risk.  Argentina is expected to see net drying over the next 10 day to 2 weeks.  While current moisture levels support planting and early crop development, follow up rains will be needed in late Dec-24 or early Jan-25 to keep production prospects high.  Overnight Chinese customs data overnight showed that they imported 7.15 mmt of soybeans from all sources in Nov-24.  While this was down nearly 10% from Nov-23, cumulative imports in 2024 have reached 97.1 mmt, up almost 9.5%.  The USDA kept their Chinese soybean imports unchanged for the 24/25 MY at 109 mmt.  

QST soybean futures chart 12.10.24

WHEAT

Today’s USDA data was neutral to supportive for wheat prices.  US ending stocks were down 20 mil. to 795 mil. bu. slightly below expectations.  Imports rose 5 mil. while exports were up 20 mil. bu.  Global stocks little changed at 257.9 mmt, in line with expectations.  Russian and EU exports were lowered 1 mmt each.  Ukraine exports up .5 mmt.  Bitter cold is expected to sink into Ukraine, Southern Russia and Kazakhstan late this week, however there is expected to be enough snow cover to prevent significant crop damage.  A surge of cold temperatures is expected to impact the central US by midweek before a rapid warmup by this coming weekend.  Little to no precipitation for the plain states or WCB into mid-month.  Downside risk would appear limited as global stocks among exporters remain tight.  Could still use a spark to ignite a short covering rally.

QST wheat futures chart on 12.10.24

All charts provided by QST.

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