CORN HIGHLIGHTS:

• Selling pressure across the grain markets, led by strong selling in the soybean market, weighed on corn futures, resulting in moderate losses on the day.
• Concerns over the expiration of tax credits for biofuels pressured grain markets for the second consecutive day. The 40B tax credit, which supports the sustainable aviation fuel (SAF) program, is set to expire at the end of the year. With no plan for extension into 2025, the lack of clarity has triggered selling across the grain markets.
• The Brazilian real continues to lose value against the US dollar, reaching new historical lows again on Wednesday. The weaker currency gives Brazilian grain exports a significant price advantage over US offerings.
• Weekly ethanol production remains strong, rising to 1,103K barrels per day for the week ending Dec. 13, up from 1,078K bpd the prior week. Corn usage for ethanol was estimated at 107.3 mb, higher than the previous week but below last year’s levels. Corn use for ethanol remains ahead of USDA targets for the marketing year.
• Weekly export sales will be announced Thursday morning. Last week’s sales fell below expectations, disappointing the market. New sales are expected to range between 800,000 and 1.6 mmt, with traders looking for direction in corn exports.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day sharply lower for the fourth consecutive day, hitting new contract lows. Both soybean oil and meal also declined, with soybean oil posting larger losses recently. A flash sale reported this morning was largely dismissed by traders.
• The devaluation of the Brazilian real relative to the rising US dollar has made US soybeans less competitive. However, the larger bearish news today may stem from concerns about the expiration of the 40B tax credit at the end of the year, which could impact renewable diesel and, consequently, soybean oil.
• The 40B tax credit will expire at year-end, and although the Biden administration was expected to implement the 45Z tax credit for 2025, this has not yet occurred. The uncertainty surrounding biofuels and sustainable aviation fuel has led traders to sell aggressively.
• This morning, the USDA reported a flash sale of 120,000 metric tons of soybean cake and meal for delivery to Colombia during the 24/25 marketing year.

WHEAT HIGHLIGHTS:

• Wheat posted losses again, fueled by lower corn prices and sharply lower soybeans in another risk-off session. The Fed’s decision to cut interest rates by 25 basis points has caused the U.S. Dollar Index to rise sharply, which may add pressure on wheat in the coming days.
• Despite scattered showers in southern Australia, the weather pattern looks drier as the year-end approaches. This should aid in their remaining wheat harvest.
• Chinese customs data shows November wheat imports at just 70,000 metric tons, down 89.9% year-on-year. Year-to-date imports have also declined 4.1% to 11.02 million metric tons.
• Egypt is preparing to receive the first shipment of their 430,000 metric ton purchase of Russian wheat from September, which was delayed from its original October schedule for unknown reasons. The vessel is said to be carrying 63,000 metric tons of wheat.
• Weather models indicate above-normal temperatures in European Russia through December, but thick snow cover should protect dormant wheat from damage, despite a potential cold snap approaching.

DAIRY HIGHLIGHTS:

• Class III milk futures lost momentum midweek, January futures lost 34 cents to close at $20.17.
• Spot cheese saw no change today, with 0 loads being traded and remained at $1.82250/lb, while whey gained 0.50 cents to close at $0.75/lb.
• Class IV milk had minimal gains today, January and February futures each gained 2 cents to close at $20.70 and $20.52.
• Spot butter closed down 1 cent today at $2.5100/lb. Spot powder also was down, losing 0.75 cents to close at $1.3725.

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Author

Brandon Doherty