Weekly Recap 12/29
Year in Review:
Check them out!
Market Recap:
The Panama Canal recently announced they will allow 24 Panamax vessels per day beginning in mid-January. This is an increase from 18/day currently. Rains have been lacking all fall and winter in Central America, which has been impacting flow through the Panama Canal since August, when the first cap of 32 vessels/day was implemented. This is good news for American exports out of NOLA and Houston as grain ships have been forced to route all the way around South America to reach Asia, adding shipping costs and time. On average, a ship can save about 8,000 miles and 18 days of travel time using the canal.
Exports from last week were mostly within expectations across all commodities and are on pace to hit the current USDA export expectation. Look for export expectations to remain steady in the January WASDE. The US has sold 37% more corn year-over-year, 1% more wheat, and -15% soybeans year-over-year.
It is estimated managed money is only long about 5,000 contracts of soybeans compared to almost 90,000 contracts of length last month. Funds are short about 180,000 corn contracts which is steady.
Corn basis peaked about 10 days ago for nearby shipment, but buyers are looking for January coverage. The market believes $5 cash corn moves a lot of bushels JFM. A lot of folks will be likely to move corn to pay spring bills/rents so if you are looking to move JFM corn be sure to have a plan in place early January.
Weather:
For the most part, it has been a damp December for the western corn belt. Below is a map showing the ranking of December moisture different states. We’ll see what the rest of the winter and spring bring, but outside of Western Iowa and South Central Nebraska, most of the western belt is in currently decent shape moisture wise.
The bright red area in the Southeast is reflective of the reduced draft in the Mississippi River.
Economy:
The S&P 500 closes the year at all-time highs around 4,800 points, rallying appx 24% this year following 2022’s 22% decline from previous all-time highs.
The U.S. posted a $1.7 trillion budget deficit for fiscal 2023, a 23% jump from 2022.
Per Bankrate, 59% of U.S. adults feel like the economy is in a recession. It is estimated a record high 653,000 people in the U.S. are homeless, up about 100,000 over the past five years.
In 2023, average monthly childcare payments were 32% higher than in 2019, according to Bank of America.
CNBC reports home sales have dropped to a record low, even worse than the financial crisis.
Pizza Hut franchises laid off more than 1,200 delivery drivers in California as they brace for a newly passed law requiring $20/hr minimum wage for fast food workers.
Cattle:
COF last Friday came in bearish with on-feed at 102.7% of last year, placements 98.1%, and marketings 92.6%. Futures opened the week lower but recovered on cash cattle trading 2-3 higher on the week. Futures prices ended the week virtually unchanged besides the soon expiring Dec. Year over year cash cattle finished $15 higher at $1.73. Supplies are expected to contract the first 3 quarters of 2024, but demand will be in question as boxed beef has been faltering.
Something That Probably Means Nothing:
It is reported Bill Gates has purchased at least $113 million worth of Nebraska farmland since 2017, spanning approximately 20,000 acres over 19 counties.
The link below is worth a read!
Quote of the Week:
“Don’t’ live the same year 75 times and call it a life.” – Robin Sharma
Happy New Year!
