Dear Valued Customers & MarketMix Followers:

As we wrap up a remarkable 2023, we want to extend our heartfelt gratitude to each of you for being a part of our journey. Your support, trust, and enthusiasm has fueled our commitment to excellence throughout the year.

As we enter the festive season, we want to take a moment to wish you and your loved ones a Merry Christmas and a joyous holiday season. May this time be filled with warmth, laughter, and cherished moments.

Looking ahead to the New Year, we extend our sincerest wishes for a Happy New Year! May 2024 bring you prosperity, good health, and continued success. We are excited about the opportunities the future holds and are grateful for the privilege to continue serving you.

Thank you once again for being a valued part of the D & D MarketMix community. We look forward to a fantastic 2024 together!

D&D wishes you a very Happy Holiday & Joyful New Year!

Increase in Corn Exports and Stable Production Outlook for Brazil and Argentina

USDA’s December World Agricultural Supply and Demand Estimates report held little news last week, in what was expectedly an uneventful report. 

For corn, the one notable change was a 25 million bushel increase in exports, largely reflecting new deals booked in recent weeks. Overall ending stocks declined by this amount from November, with 2023/2024 US holdings estimated at 2.156 billion bushels, which will keep the US and the world well supplied. Interestingly, USDA did not adjust its corn production outlook for Brazil or Argentina. Despite ongoing weather concerns in the major South American producing regions, USDA decided to punt on a revision, at least for now. 

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Decrease in Brazilian Soybean Production and Stable US Ending Stocks

For soybeans, USDA’s primary adjustment to world stocks came from a slight decrease in Brazilian bean production, cutting output from 163.0 million metric tons to 161.0. US ending stocks held steady at 245 million bushels, despite what has been a record-setting crush pace over recent months. The global market is depending on South America to replenish soybean and protein supplies, as tightness continues to provide challenges to our dairies in the US. 

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Ethanol Production Boosts Corn Market, Potential Changes in Subsidies for Sustainable Aviation Fuel

On the corn side, ethanol plants have been running hard the last couple of weeks. US Department of Energy reported production for the week ending December 9 up 1.2% compared to last year at this time. Stocks are down 9.5% versus 2022, keeping some support under the corn market. Plants have maintained a firm basis to keep up with the grind, limiting the post-harvest relief in basis that we normally see this time of year. News to watch for: The Biden administration is expected to release guidance this week on potentially easing subsidies for sustainable aviation fuel made from corn-based ethanol. 

Corn Futures in Sideways Trend, Potential Impact of Brazilian Dryness and Wheat Demand

Corn futures continue to chop sideways, in what has been a longer-term downtrend since the summer highs. Downside price potential may be limited by Brazilian dryness, along with recent demand for US soft red winter wheat, but it will take a dramatic cut in South American production to rally us back above $5. In the meantime, one can remain fairly patient on corn purchases for the dairy. 

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Impact of Panama Canal Water Shortage on Global Shipping and Trade Routes

Panama Canal operations have been curtailed in recent months due to a lack of rainfall and dropping water levels. This is likely to raise global shipping costs along many routes and cause a re-shuffling of global trade. In particular, it will likely hinder US exports out of the Gulf region to Asian destinations due to the delays in passage through the Canal and/or increased cost of circumnavigating South America.

Federal Reserve Holds Interest Rates Steady, Hints at Possible Rate Cuts in 2024

The Federal Reserve Open Market Committee met this week to discuss the state of the economy and review its strategy for interest rates. Officials have committed to hold rates steady until their next meeting at the end of January. Chairman Powell noted the easing of inflation without a corresponding spike in unemployment. He hinted in his remarks that rate increases might be over if economic news remains positive. Committee feedback suggested up to a handful of rate cuts may come in 2024. The initial reaction from equity markets was mild exuberance with the Dow Jones Industrial Average jumping more than 300 points.

Jordan Miller: 419-692-3206

ext. 1043

Pat Kahle: 517-260-8295 or P[email protected]

Protect Your Downside

Given current market conditions, the Ever.Ag Feed Foundations Team recommends putting strategies in place to protect your downside. If you’re locking in high prices, consider buying inexpensive puts underneath. Please contact Jordan Miller or Pat Kahle who can direct your questions to the appropriate advisor to discuss specific strategies.

This monthly report is brought to you by Ever.Ag’s Feed Foundations Team. The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. By law we must state the information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.

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