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Grain Comments: 12-27-2023

Good morning.

Turn around Tuesday on a Wednesday this week, as ag markets have given back yesterday’s gains so far in the overnight session. With the exception of South American weather forecasts, fresh corn/soybean/wheat specific news is absent. Corn futures are 1-2 cents lower, soybean futures 6-7 cents lower, and the Chi wheat market is also off 6-7 cents. Bean meal is down around $2.50/ton and bean oil is down 40-45 points. Outside markets were also softer, crude oil futures are down around 40 cents/bbl, the Dow Jones index is down 25 points, and the US$ index is 6 points lower.

Quiet week continues at the CBOT. No new fresh geopolitical headlines overnight are viewed as a good thing. Financial markets are quiet to end the year, with not much in the way of data coming out this week.

The countryside was also quiet to start the week, as end users are pretty well covered into January and producers don’t see any incentive to sell just yet. More will come to light on this after the first of the year and as we begin to get a slightly better grasp on South American production.

Soybean harvest in Mato Grosso is estimated to be 1% complete as of last Friday. A local producer said this is the first time he’s ever harvested soybeans in December.

Early yields are disappointing and have so far confirmed the drought-based fears. Worth noting that with the planting window extended until January 13th, producers in the same state will be planting and harvesting soy at the same time.

Later planted beans are expected to benefit from last weekend’s rains and stand to gain more from a further shift to a more wetter weather profile going forward.

Overnight South American weather forecasts were like yesterday’s runs in keeping normal to above normal rainfall in the 10–15-day period following another 4-5 days of heat and dryness.

COCERAL released its 2024 grain crop estimates for the EU yesterday: Total wheat crop is forecast at 133.3 mmt’s vs 132.8 last year; barely crop is forecast at 50.7 mmt’s vs 47.6 last year; and the corn crop is forecast at 63.7 mmt’s vs 61.8 last year.

Russia reported 2023 grain harvest at 142.6 mmt’s, its second largest crop ever behind the 2022 crop, which was 157.61 mmt’s.

China has issued licenses to 26 domestic seed companies to produce, distribute and sell genetically modified corn and soybean seeds in certain provinces. This comes as Beijing seeks to reduce its reliance on imports, which amount to over 100 mmt’s per year, due to the need to feed its livestock herd.

Industry sources believe Chinese corn breeders are expecting to plant about 670,000 ha’s of GMO corn in the 2023 season, more than double last year.

Shipping company Hapag-Lloyd DID NOT resume transit through the Red Sea yesterday, as the situation remains too dangerous to pass. They also mentioned they are “continually assessing the situation,” and will have another update on Friday.

Israeli Chief of Staff Herzi Halevi said the fighting in the Gaza Strip would last “many months,” and that there were no “magic solutions” or “shortcuts”, following another day of intense bombing.

Have a great day!

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