CORN HIGHLIGHTS:

• Overall, the negative tone of the commodity space weighed on corn futures, as corn prices consolidate around the 430 area on the most active March contract.
• Ethanol production fell to 1.073 mbd (315 million gallons/day) last week, down from the previous week’s record of 329 million gallons but still above USDA targets. About 108.4 mb of corn was used for production.
• Uncertainty over clean fuel tax credit guidance (45Z policy) persists, with mixed reports on whether it will be in place before President Biden’s term ends. Traders are likely taking a wait and see approach to this potential policy.
• USDA corn export sales, due Thursday, are expected to range from 750,000–1.5 mmt for last week, following the previous week’s total of 1.062 mmt.
• Brazilian producers are ahead on 2025 Safrinha corn inputs, with 70% secured, driven by favorable exchange rates. Increased second-crop planting remains possible with current weather conditions.

SOYBEAN HIGHLIGHTS:

• Soybeans closed lower, erasing all of yesterday’s gains and more, as the market continues to trade sideways. Favorable South American weather and rising production estimates weighed on prices. Soybean meal finished higher, while soybean oil tracked weaker palm oil prices.
• This morning, the USDA reported private export sales of 30,000 metric tons of soybean oil to South Korea for delivery during the 24/25 marketing year, highlighting strong demand potential with soybean oil currently at a steep discount to palm oil.
• In November, Malaysian palm oil inventories fell 4.3% to 1.8 million tons, while crude palm oil production declined 5.6% to 1.7 million tons. This has been supportive to palm oil prices, but soybean oil has been following those moves less closely.
• Some pressure in the soybean oil market may be coming from the incoming administration’s potential policies on biofuel use in the US, and the lack of current guidance on the 45Z policy. It is unlikely that these will have any long term effect on demand as global biofuel use has trended significantly higher over recent years.

WHEAT HIGHLIGHTS:

• Wheat clawed back to a positive close in Chicago and Kansas City futures, while Minneapolis posted small losses. Matif wheat’s mixed close and the consolidating US Dollar Index offered little direction.
• Rumors of wheat quality concerns from excessive rains in southeastern Australia, despite projections of a larger crop than last year, may have supported the US market.
• Ukraine’s 24/25 wheat shipments reached 8.96 mmt from July to November, up from 5.8 mmt last year. Despite elevated Black Sea tensions, grain exports remain largely unaffected.
• Statistics Canada will release updated wheat production estimates tomorrow, with an average pre-report projection of 34.3 mmt, matching August’s forecast and 4.1% above last year’s crop.

DAIRY HIGHLIGHTS:

• Spot cheese continued its upward trend today, closing the day up 2.3750 cents to close at $1.68375/lb.
• Spot Whey had another down day, losing 2.25 cents to close at $0.7025/lb.
• Class III futures followed cheese with another strong day with January up 46 cents to close at $19.10.
• Spot butter gained 1.75 cents to close at $2.5400/lb, and spot powder lost 0.50 cents to close down at $1.3700/lb.
• November settlement prices for Class III came in at $19.95 and Class IV at $21.12.

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Author

Brandon Doherty