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Corn Outlook:
Corn futures have been rising during the past few months from expectations of improving demand. Ethanol usage has been robust, but feed consumption is flat, while an improvement in exports is questionable. Meanwhile, looking at 2025, we face some hurdles, namely rising production prospects in South America. In Brazil, their corn crop is forecast at 127.0 million tons, well above the five-year average of 112.8 million. Argentina’s production is projected at 51.0 million tons compared to their five-year average of 49.7 million. With the U.S. dollar at a two-year high, and rising against the Brazilian real, South America will definitely be a competitive threat. Although corn exports are forecast at 2.475 BB, we must ship 53.4 MB on a weekly basis for it to be met. So far, there has not been a shipment that large. Last week, inspections were only 34.5 MB. The bottom line in corn is that unless dryness in Argentina expands during the next couple of weeks, or exports catch on fire, the bulls may be getting ahead of themselves.
Bean Outlook
Soybeans face the same situation as corn for 2025, in that production prospects in South America are rising, as weather is favorable in Brazil, but there are some dry areas in Argentina. USDA currently projects Brazil’s soybean crop at 169.0 million tons, while some private sources forecast it as high as 170.0 million. Meanwhile, the five-year average for their production is 142.7 million tons. Looking at Argentina’s crop, it is forecast at 52.0 million tons with their five-year average being 42.2 million. Soybeans will face the same problem as corn regarding demand, as the dollar is rising against the Brazilian real making our exports more expensive. Last week, inspections fell to 57.6 MB, their lowest since mid-October. China took 27.5 MB which was slightly higher than the previous week. Meanwhile, shipments to them have fallen 43 percent since November, while our overall shipments have declined nearly 29 percent. The bottom line is that regardless of potential tariffs the Trump Administration might impose, China’s sourcing of soybeans has already turned to Brazil.
Wheat Outlook:
Declining global stocks and extreme cold temperatures forecast in the Plains next week is supportive to wheat but strength in the dollar poses a headwind. Although Russia’s exports are forecast to decline, very little business is being switched to the U.S. Last week, inspections were 12.4 MB and below the average of 18.1 MB that must be shipped weekly to reach USDA’s target of 850 MB. We have not seen a shipment that high since late September. The bottom line is that for wheat to continue higher, it may need an additional stimulus.
Comments and suggestions are provided for information purposes only. Information contained herein is obtained from sources believed to be reliable but not guaranteed to its accuracy or completeness. Readers using the information contained herein are responsible for their own actions. No presentations can be made that recommendations will be profitable or that they will not result in losses. This information is neither an offer to sell nor solicitation to buy of the commodity futures mentioned herein. The writer may be trading in the commodities mentioned