Weekly Market Update 11-21-24

Here is your weekly market update from the Garden City Co-op Grain Origination Team.

Trivia

1. In 2023, what state was responsible for raising the most turkeys for Thanksgiving?

2. What year did “A Charlie Brown Thanksgiving” debut on television?

Answers at the bottom.

Market News

RUSSIA & UKRAINE: The situation escalates, increasing risks for commodities from the Black Sea Region. Recently, President Biden permitted Ukraine to use U.S.-made weapons to strike deep inside Russia. Ukraine launched U.S. missiles into Bryansk on the 1,000th day of the war, followed by British missiles into Kursk. In response, Russia targeted Dnipro with an intercontinental ballistic missile (ICBM)—the first use of an ICBM designed for nuclear payloads in any war. Although no nuclear warhead was involved, President Putin aims to instill fear. The RS-26 Rubezh missile reportedly has a range of 3,600 miles but traveled only 435 miles in this incident. At 40 feet long and weighing around 36 tons, it is costly to deploy, indicating its use is aimed more at sending a message than military necessity. Markets do not expect Putin to launch nuclear weapons near Moscow, but they are concerned that ongoing escalation could threaten civilian ships in the Black Sea, as both sides can target these vessels in the conflict. They appear to be ramping up actions to gain leverage before Donald Trump takes office on January 20th. Trump promised to end the war swiftly, which is interpreted as his push for peace talks. Thus, Russia and Ukraine likely aim to strengthen their positions before negotiations.
 

EXPORT INSPECTIONS: Another week of decreased wheat inspections for exports with 7.2 million bushels inspected, versus 13.0 million bushels last week. This week, of the 7.2 million bushels, 2.3 million bushels are set for export markets in Mexico and 1.6 million bushels are destined for export to South Korea. Rising about last week’s export inspections, corn totaled 32.3 million bushels this week, falling 1.6 million bushels below the USDA’s running 10-week average; however, still sitting 3% above the year-to-date inspections relative to the seasonal-pace needed to reach USDA’s target values. A total of 79.6 million bushels of soybeans were inspected for exports this week, compared to 86.8 million bushels inspected in last week’s report. The largest portion of the United State’s soybean bushels will be traveling to China (51.1 million bushels), followed by 5.3 million bushels for export to Germany, 3.7 million bushels for export to Mexico, and 1.8 million bushels for export to Italy. Milo exports fall below last week’s inspection numbers, however, remaining on-par with trends from previous weeks, with 2.5 million bushels inspected for export markets this week, versus 6.6 million bushels in last week’s report.

EXPORT SALES:Old crop corn sales totaled 58.8 million bushels this week, falling below the running 10-week average for corn sales at 67.7 million bushels. Corn remains 11% above the marketing year-to-date sales relative to the seasonal pace needed to reach USDA targets. No N/C corn sales were reported this week. Soybean sales this week totaled 68.4 million bushels, with no N/C sales this week. Wheat sales remain steady with O/C sales at 20.2 million bushels sold this week; 2.7 million bushels of HRW, 5.0 million bushels of HRS wheat, 1.4 million bushels of SRW, 9.9 million bushels of white wheat, and 1.3 million bushels of durum wheat. Once again, no N/C wheat sales were recorded on this week’s report. Milo sales totaled 4.8 million bushels of O/C grain sold, while no N/C milo sales were reported.

China/Brazil: Earlier this week, China granted Brazil permission to export sorghum to Chinese buyers – a somewhat strange move since Brazil’s exports of milo are minimal.  The U.S. is overwhelmingly the largest world exporter of milo and China is even more overwhelmingly the largest importer. USDA estimates that the U.S. will account for 56% of all milo exports for 2024-25, followed by Australia at 23%, while China is estimated to account for 88% of all global imports. Brazil’s milo production has steadily increased over the last several years, and this new agreement could incentivize Brazilian farmers to expand milo acres. While the immediate impact is limited, it does reinforce the alignment of BRIC nations amid ongoing geopolitical tensions between China and the U.S. and could position Brazil as a viable alternative to U.S. milo in the long term.

WEATHER: A relatively uneventful weather forecast for the remainder of this week and into next week coming off a week of rainy skies across most of the area. Sunny skies are in the forecast today, with a high of 51°F. Overnight, mostly clear skies are expected, with a low temperature somewhere in the mid-20s. Friday’s forecast is sunny once again with a high temperature of 60°F and low temperatures dipping into the upper-20s throughout the evening hours. Much the same for your weekend forecast; Saturday and Sunday are mostly sunny with high temperatures in the lower-60s. Evening temperatures this weekend dipping to the upper-20s and low-30s. The beginning of your holiday week looks to be high temperatures of 46°F Monday and Wednesday, and a high of 47°F on Tuesday. The weeks overnight temperatures hold steady too around 26°F.

 

 

 

Trivia Answers

1. Minnesota

2. 1973