Surprisingly few changes in Dec. 8 USDA numbers

By Doug Tenney, Leist Mercantile

Trade expectations: U.S. soybean exports and while U.S. soybean crush were both unchanged. That is a surprise. U.S. corn exports up 25 million bushels.

U.S. highlights

Few changes were expected. USDA follows the pattern of years past as  December corn and soybean production and yields mirror those of November. Corn 2023 production 15.234 billion bushels, yield 174.9. Soybean 2023 production 4.129 billion bushels, yield month 49.9.  U.S. corn exports for 2023-2024 were up 25 million bushels.      

Following the noon USDA report release, corn was up 1 cent, soybeans up 3 cents, and wheat  down 7 cents. Moments before the report was released, corn was up 2 cents, soybeans up 9 cents, and wheat down 3 cents.

U.S. 2023-2024 ending stocks: corn 2.131 billion bushels, last month 2.156 billion bushels; soybeans  million bushels, last month 245 million bushels; and wheat 659 million bushels, last month 684 million bushels. 

Trader estimates for 2023-2024 U.S. ending stocks were: corn 2.152 billion bushels; soybeans 243 million bushels; and wheat 684 million bushels. 

Don’t get lulled to sleep thinking the grains will move sharply lower the next 6 months. We are seeing an encouraging note the past 10 days with China not only buying U.S. soybeans, while now also buying U.S. corn and even U.S. wheat. Those corn sales and wheat sales were not in the cards 3 to 8 weeks ago.

Crude oil prices have been on the defensive since the Nov. 30 highs for the January NYMEX reached $79.60. OPEC + announced cuts on November 30 of one million barrels per day. This cut was expected as plans were announced months ago to pup less crude oil. The weekly U.S. EIA Energy Report on Wednesday detailed U.S. crude oil stocks declined 4.6 million barrels from the previous week. This was a much bigger decline that the expected decline of 1.5 million barrels. Yet, January crude oil was down $2.94, closing at $69.38 on that report day. Closing sharply lower with an unexpected friendly report is a classic bullish failure when bullish news is presented. It will do some damage to those which were expecting $140 in the second quarter of 2024 when crude oil reached $90 late September. Recession fears and slowing world economies are still a big concern for economists. 

Brazil weather continues to be in the news as it has been dry in the central and northern regions while too wet in the south. While it is the dominant feature at this time, it does feel like it is becoming a stale tone. 

Look for the markets to quickly return to focusing on South America weather as the main news feature for weeks yet to come.

Ohio’s corn harvest still continues in parts of the state, particularly in the northwest. Those that still have corn in the fields are in areas where elevators are plugged with limited inbound capacity unless bushels move further into the pipeline. In addition, numerous Ohio grain facilities are plumb full as harvest completion is taking place.

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