Written Commentary
OPENING COMMENTS
Macroeconomics:
Currently 5 dead and more than 130,000 people displaced due to the fires in LA County. 16 different school districts closed and the fire fighting units have asked for experienced help from their respective communities. It is the most devastating fire in LA county history and could cost up to $57 billion in damages.
Ag Fundamentals:
Today we will have an early close in grain markets, at 12:15pm CST. The settlement period will be between 11:59am-12:00pm CST with a 15 min post settlement period following. I expect some volatility to seep into the row crop boards due to tomorrow’s USDA WASDE, quarterly grain stocks and wheat seedings reports. Argentina could see some relief in the next 10-15 days with rain starting to creep into their forecasts. Brazil continues to receive showers scattered across their main growing areas. I do not expect a large decrease in Argentina production in tomorrow’s report. The USDA may increase their Brazilian production estimate above 170 MMT, but Argentina will likely go nearly unchanged until next month’s report. Mato Grosso has just started early bean harvest. By January 12th 2024, Mato Grosso had already harvested 6% of their bean crop. Corn could see a drop in production in tomorrow’s report. The largest estimated production shift is corn is as high as 170M bushels lower. If we saw that and an increase in ethanol usage, it’s possible ending stocks could drop to below 1.6 billion bushels. That could send corn prices above 460 and would be a catalyst until US plating intentions are announced. India wheat production is still optimistic, estimated at 112.7 MMT (unchanged from the last update).
The Mississippi River Gauge at St. Louis causing a slight reduction in barge draft levels. Drafts has recently dropped from 9’6 ft to 9’0 ft. Ice is forming on the shores of the Illinois River, but they are still able to navigate through.
2024 Hurricane Tracks: Beryl starts the season off hot last year with the earliest recorded category 5 hurricanes east of the Lesser Antilles in the month of June. Helene was the second deadliest hurricane to hit the US in 50 years. Milton was the third hurricane to hit Florida which ties the record for the state. Total damage last year is estimated to have reached a record $500 billion. Insurance spiked in the southeast.
Export & World News
South Korea bought an estimated 65K MT of animal feed corn; South Korea also bout 130K MT of animal feed wheat in two international tenders. Taiwan bought about 115K MT of milling wheat to be sourced from the US.
Malaysian palm oil futures were down 58 ringgit overnight, at 4296.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
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