Written Commentary
CORN
Last year’s record US corn crop was increased another 108 mil. bu. to 15.342 bil. with the average yield rising to a record 177.3 bpa. Harvested acres were cut by 500k acres. Production was 115 mil. above expectations, however within the range of estimates. Dec. 1st stocks at 12.168 bil. was 118 mil. above expectations and up 1.355 bil. from YA. The USDA raised usage 75 mil. bu. with a 50 mil. bu. increase for ethanol production with feed usage increased by 25 mil. bu. Ending stocks increased 31 mil. bu. from the Dec est. to 2.162 bil. roughly 55 mil. above expectations and the highest in 5 year. The average US Farm Price slipped $.05 to 4.80/bu. World stocks surged to 325 mmt, up 10 mmt from last month and up 25 mmt from YA almost entirely due to increased Chinese production. If achieved global stocks would be the highest in 6 years. Argentine production was left unchanged at 55 mmt, while Brazil was cut 2 mmt to 127 mmt, while their exports were cut 1 mmt. Time will tell if speculative traders are willing to add to short positions below $4.50, which represent 3 year lows.
SOYBEANS
Last year’s US soybean crop was increased 36 mil. bu. to 4.165 bil. with the average yield rising to a 50.6 bpa. Production was nearly 40 mil. above expectations, however within the range of estimates. Dec. 1st stocks at 2.999 bil. was 24 mil. above expectations, however down 22 mil. from YA. The USDA’s only change to usage was a 3 mil. bu. reduction to residual. Ending stocks rose 35 mil. bu. to 280 mil., a 4 year high, vs. expectations of near unchanged. No change to the US meal balance sheet. Soybean oil usage for biofuel production rose 200 mil. lbs. to 13.0 bil. lbs. which was offset by lower exports and other domestic usage, along with higher imports. The average US farm price fell $.15 bu. to $12.75. World stocks were steady at 114.6 mmt vs. expectations for a 3 mmt drop. As expected Brazilian production was cut 4 mmt to 157 mmt, while Argentina rose 2 mmt to 50 mmt. With the expected huge rebound in soybean production this year, Argentina is expected to regain the crown as the global leader in meal exports. Production in Paraguay was raised .3 mmt to 10.3 mmt enabling combined production among the top 3 SA producers to still reach 217.3 mmt, well above the previous record of 195 mmt 3 years ago. There were no changes to the Chinese imports. Spot board crush margins did rebound another $.07 today to $1.03 bu. and were up $.23 for the week. Bean oil PV increased to 40%, a 3 month high. Spot Mch-24 held above $12.00, if violated not much support until the May-23 low near $11.45.
WHEAT
US wheat ending stocks fell 11 mil. bu. to 648 mil. vs. expectations for no change. This was the first YOY increase in 7 years. The lower stocks were attributed to an adjustment from 2 years ago which carried thru to present. Dec. 1st stocks at 1.410 bil. were 23 mil. above expectations however down 112 mil. from YA. World stocks rose nearly 2 mmt to 260 mmt, vs. expectations of no change. The only noted changes to global production was a 1 mmt increase to both Russian and Ukraine production to 91 and 23.4 mmt respectively. Russian exports rose 1 mmt to 51 mmt, while Ukraine’s jumped 1.5 mmt to 14 mmt. 2024 US winter wheat acres at 34.4 mil. were down 2.3 mil. from YA and 1.4 mil. below the average trade est. By class acres were: HRW – 24.0 down 1.7 mil. from YA and 1.1 mil. below expectations, SRW 6.86 mil., down .5 mil. from YA and .5 mil. below expectations, white – 3.54 down .1 mil. from YA and slightly below expectations.
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