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Corn Outlook:
Nearly everyone has written off the grains for 2024 and is looking ahead to 2025. The focus right off the bat next year will be the crop report on January 10th, the Trump Administration’s agenda on tariffs, South America’s weather, and exports. While the threat of tariffs is a concern, China and other trading partners may be more willing to negotiate in Trump’s second administration. Looking at South America’s weather, conditions are mostly favorable for the moment. Regarding exports of corn, the pace has been improving since early November but has a way to go in meeting USDA’s target of 2.475 BB. Last week, inspections were 44.4 MB, the second highest of the season. However, they must average 52.7 MB every week if USDA’s projection is to be met. The bottom line is that it will be a challenge to achieve their projection, and unless weather in South America becomes a factor, price gains will be limited.
Bean Outlook
You will not find much holiday cheer in soybeans this season. This is because weather in South America is mostly favorable, other than a few dry pockets in Argentina. Brazil is expected to produce a record crop with some private sources increasing their forecasts to 170.0 million tons versus USDA at 169.0 million. Meanwhile, China’s interest in soybeans is turning to Brazil. Last week, export inspections were below the previous week at 61.5 MB with China taking 37.6 MB. Since mid-November, our overall shipments have declined 19.1 percent, while deliveries to China have fallen 30.9 percent. The bottom line in soybeans is that without a weather scare arising in South America, the bulls have little incentive to step up to the plate.
Wheat Outlook:
Global stocks of wheat have been declining since 2019 which is improving the fundamental outlook. Furthermore, exports from Russia are forecast to decline. However, the market has failed to show a friendly response. This is largely because of the dollar climbing to its highest level since November 1022. Looking at exports, inspections last week exceeded the previous week at 10.9 MB, but were below the average of 18.2 MB that must be shipped weekly to meet USDA’s projection of 850 MB. The bottom line in wheat is that while the fundamentals are improving, the market may not show much response until the crop emerges from dormancy next spring.
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