Evening Report | January 2, 2024

Evening Report
Evening Report
(Pro Farmer)

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

 

StoneX slashes Brazil soybean crop forecast below year-ago... StoneX slashed its 2023-24 Brazilian soybean crop forecast by 9.1 MMT to 152.8 MMT, which would be well below last year’s record crop. The ag consultancy cut its 2023-24 soybean export forecast to 95 MMT.

StoneX also reduced its forecast for Brazil’s 2023-24 corn production to 124.6 MMT.

 

Record soy crush for November... U.S. processors crushed 200.1 million bu. of soybeans in November, which was in line with expectations and a record for the month. Soybean crush slipped 1.3 million bu. (0.6%) from the all-time record in October but topped year-ago by 10.5 million bu. (5.5%).

Through the first three months of 2023-24, crush totaled 576 million bu., 4.1% above the same period last year. To hit USDA’s forecast of 2.300 billion bu., the crush pace must run 4.0% above the same period last year over the final nine months of 2023-24.

Soyoil stocks at the end of November totaled 1.592 billion lbs., up from 1.507 billion lbs. for October but down from 2.112 billion lbs. last year. Soyoil stocks were 65 million lbs. lower than anticipated.

 

Corn-for-ethanol use higher than expected... Corn-for-ethanol use totaled 455 million bu. during November, according to USDA, topping expectations of 451 million bushels. Corn-for-ethanol use dropped 5 million bu. (1.1%) from October but was 4.5 million bu. (1.0%) more than November 2022.

Through the first three months of 2023-24, corn-for-ethanol use totaled 1.345 billion bu., up 4.9% from the same period last year. To reach USDA’s forecast of 5.325 billion bu., corn-for-ethanol use must run 2.2% above year-ago for the final nine months of the marketing year.

Dried distillers grain with solubles (DDGS) production totaled 1.797 million short tons in November, down from 1.820 million tons the previous month but up from 1.778 million tons last year.

 

Farmer sentiment stabilizes as inflation expectations subside... The Purdue University/CME Group Ag Economy Barometer recorded a reading of 114 in December, down one point (0.9%) from the previous month and 12 points (9.5%) under year-ago. The Current Conditions Index for December was 112, while the Future Expectations Index was 115, both down one point from the previous month.

Farmers perceived continued improvement in their farms’ financial performance as the Farm Financial Performance Index rose by two points compared to a month earlier. Since late summer, the index has climbed 11 points and was 21 points higher than in May when it reached the low for the year.

At year-end, farmers still pointed to input costs as their top concern for the year ahead, but the percentage of them choosing the risk of lower crop and/or livestock prices rose from just 16% in January to 26% in December. Inflation expectations among farmers moderated during 2023. Compared to a year earlier, far fewer producers expect inflation to exceed 6% in the new year, and a large majority look for inflation to average less than 4% in 2024. Farmers expressed a somewhat more sanguine view of interest rates than they did in late 2022 with just over one-third of survey respondents indicating they expect prime interest rates to decline in 2024.

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Global shipping firms continue Red Sea pause... Denmark’s Maersk and German rival Hapag-Lloyd said on Tuesday their container ships would continue to avoid the Red Sea route that gives access to the Suez Canal following a weekend attack on one of Maersk’s vessels. Both shipping giants have been re-routing some sailings via Africa’s southern Cape of Good Hope as Yemen-based Houthi militants attack cargo vessels in the Red Sea.

Maersk had more than 30 container vessels set to sail through Suez via the Red Sea, an advisory on Monday showed, while 17 other voyages were put on hold.

Hapag-Lloyd said its vessels would continue to divert away from the Red Sea until at least Jan. 9, when it will decide whether to continue re-routing its ships.

The Suez Canal is used by roughly one third of global container ship cargo. Redirecting ships around the southern tip of Africa is expected to cost up to $1 million in extra in fuel for every round trip between Asia and northern Europe.

 

EV full tax credit list shrinks... Just 13 electric vehicle (EV) models are now eligible for the $7,500 consumer tax credit in the U.S. due to tighter rules surrounding sourcing battery components made by Chinese manufacturers. Vehicles that are still eligible for the full tax credit include variants of Tesla’s Model Y, Rivian’s R1T pickup, Stellantis’ Jeep Wrangler 4xe, General Motors’ Chevrolet Bolt and Ford’s F-150 Lightning pickup truck. Nissan’s Leaf and Tesla’s Cybertruck fell off the list, but still qualify for a $3,750 tax credit.

 

Cal-Maine Foods to acquire Tyson Foods Dexter, Missouri plant... Initially, Cal-Maine intends to convert the chicken broiler processing plant, hatchery and feed mill in Dexter, Missouri, which Tyson shut down in 2023, into an egg-grading facility. It plans to make further investments in the future and to enter into agreements with contract farmers previously associated with Tyson, aiming to repurpose their facilities to support egg production.

 

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