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Corn Outlook:
After the new year rolls in, and trading conditions return to normal, the immediate focus will be on the January 12th final crop report for 2025, followed by production prospects in South America, potential purchases from China, and U.S. exports. Looking at corn, the key driver has been strong exports. Last week, inspections were below the previous week at 51.2 MB, but the holiday must be taken into consideration. This is below the average of 62.6 MB that must be shipped weekly to meet USDA’s target of 3.2 BB. Since the third week of November, the pace of shipments has fallen 10.3 percent and raises the question of whether exports have peaked. If they have, price gains will be limited as ending stocks of 2.0 BB are more than abundant to meet current demand.
Bean Outlook
Soybeans continue to struggle from a record crop expected in South America, and disappointment in the amount that China has purchased from the U.S. To date, they have bought approximately 8.0 million tons, which is short of their agreement to buy 12.0 million. Meanwhile, Brazil is sporting a potential record crop that will be harvested in the next few weeks. USDA projects their production at 175.0 million tons, but there are some estimates as high as 177.0-180.0 million. Looking at exports, inspections last week were below the previous week at 27.5 MB with shipments of 2.4 MB to China. However, they were above the average of 22.2 MB that must be shipped weekly to achieve USDA’s projection of 1.635 BB. Meanwhile, the pace of shipments has been on the downswing since early November and fallen 25.1 percent. The bottom line is, with a record harvest expected in South America, price gains will be limited unless China steps up their purchases of U.S. soybeans. China stepping up their purchases may be wishful thinking as they have invested over $5 billion in Brazil’s infrastructure over the past few years and plan to invest $27 billion more.
Wheat Outlook:
President Trump said last weekend that Ukraine and Russia are getting close to a peace agreement which has weighed on wheat. However, we have been down this road before only to see aggression continue. In other matters, one private source has increased Russia’s wheat production to 91.4 million tons versus the USDA at 87.5 million. Looking at exports, inspections last week were 11.1 MB, their lowest since the first week of November, and are barely on track to reach USDA’s target of 900 MB. Currently, the U.S. is more expensive than our competitors which may restrict price gains.
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