Monday January 13, 2025

• Markets are starting off the week in the green and continue to follow through on the bullish USDA report.
  • The report offered a few surprises 
• CORN
  • The USDA lowered the national corn yield by 3.8bu/acre! However even with this large decrease that is still a record national yield. 
  • The USDA attempted to offset the reduction in production by lowering feed and export demand… Regardless the carryout was tightened to 1.54billion bushels.
  • This new carryout number isn’t exactly comfortable, which doesn’t leave much room for error. If we were to see a smaller South American crop or an increase in export or ethanol demand the carryout may tighten to a point where we would need to ration demand. 
• SOYBEANS
  • The USDA lowered soybean yield to 50.7bu/acre which came in lower than even the low end of expectations. There was a small reduction is harvested acres which also contributed to lower production numbers. 
  • The demand side was left unchanged and imports increased slighlty. Carryout was lowered to 380mb.
  • The market rewarded these changes with a decent rally Friday afternoon and we are still holding onto those gains this morning. It is still important to keep in mind that a 380mb carryout is still very comfortable and our 8.7% carryout to use ratio is the highest since 2019.
  • On Friday, the US federal government also released guidance credits for renewable diesel production which would reduce the eligibility of imported used cooking oil for the industry, creating demand for soybean oil. 
  • The USDA report combined with the guidance caused CBOT prices to rally 26 cents on Friday.
• WHEAT
  • US winter wheat area for harvest in 2025 was estimated to be 2% higher than the previous year.
  • Adjustments to the wheat numbers were minor.