2024 Calendars are here!

Dec 4, 2023

Commodities were mixed today. CZ23 closed down 4 1/4 ¢, WZ23 was 18 3/4 ¢ higher and January soybeans dropped 18 3/4 ¢, as the entire soy complex struggled. Nearby soybean meal settled down $3.00, and front month soyoil ended the day 19 ¢ weaker. Both January soybeans and January soymeal futures fell to one-month lows during the session.

The crude oil market looks to extend its slide lower for a third consecutive session, while the dollar index is firmer, and the DOW is weaker. 

Central Brazil received some scattered rains over the weekend and chances are expected to continue across the same region early this week before conditions look to turn drier later in the week. Weather models continue to suggest a more significant pattern change towards the middle of the month, which could bring more monsoon-type rains to dry areas. Many private analysts have been lowering their forecasts for Brazil's soybean production over the past few weeks. (AgRural estimates Brazil’s soybean crop is 83% planted).  Conversely, Argentina's weather conditions remain favorable, with normal rainfall expected. Talk has been increasing that a normal 2024 Argentina crop could lower U.S. crush demand. 

Brazil’s Trade Ministry estimates they exported 7.4 MMT's of corn in the month of November, up 26% from a year ago and a record high for the month. They also pegged Brazil's soy exports for the month at 5.2 MMT's, which was double the amount from November 2022 and also a record high for the month.

U.S. export offerings are priced a fair amount below S American supplies for both corn and soybeans through February, though Ukraine is cheaper than the U.S. There does, however, remain uncertainty over Black Sea corn exports either due to weather or politics.  Today's weekly U.S. export inspections figures exceeded expectations on corn, notching a marketing year high while soybean inspections were slightly below expectations. U.S. wheat export inspections were also below estimates, with YTD inspections down 24% from a year ago.

USDA announced flash sales this morning of 440,000 metric tons of soft red winter wheat for delivery to China, 267,044 metric tons of corn for delivery to Mexico, and 183,000 metric tons of soybean cake and meal for delivery to the Philippines- all for the 23/24 marketing year. Mexico continues to be a solid buyer of U.S. corn and this morning’s sales announcement to China put 23/24 U.S. SRW export commitments at roughly 85% of USDA’s annual forecast. 

Traders are monitoring the increase in hostilities over the weekend in the Red Sea shipping channels. Given the significant delays to vessel transit times through the Panama Canal (due to the lack of rainwater), ocean freight markets/values have moved higher as they have adjusted to include voyage routes through the Suez Canal and Red Sea to Asia. This is primarily impacting vessels that originate from the U.S. Gulf, U.S. East Coast, and N regions of Brazil. Domestically, this has pushed more export sales through the PNW, as it has the capacity to move the bushels, heightening concern that it may be detrimental to the Gulf (NOLA, Mobile and Houston) until Panama Canal conditions improve- trimming the volume we might otherwise normally expect. If hostilities continue to escalate, preventing Black Sea and U.S. Gulf/East Coast ships from routing through the Red Sea and Suez Canal, vessels will likely have to route around the S African Cape of Good Hope, resulting in significant shipment transit times and additional increased costs.