This week’s action:
Corn March down 2 @ $6.44
Beans Jan up 44 @ $14.84
KC Wheat March down 37 @ $8.33
Feeders Jan up 1.425 @ $183.875
Fats Dec up .375 @ $153.625
Hogs Dec down .775 @ $81.675
Crude Jan down 9.54 @ $70.33
Corn Dec23 down 6 @ $5.93
Beans Nov23 up 21 @ $13.98
KC Wheat July23 down 36 @ $8.23
The December WASDE was released today. The only difference from last month is a 75-million-bushel reduction in corn exports, leading to a 75 million bushel increase in ending stocks. No changes were made to South American production. Focus now turns to the January 12 WASDE as traders will be anticipating production cuts in South America.
Local basis continues to soften for both corn and soybeans as the weather has been good for shipping grain and rail performance remains solid to the southwest feed markets. Despite the central plains drought, old crop Kansas City Wheat is trading at levels not seen since mid-August and is more than $5 below its May contract highs. New crop KC wheat is more than $4 below its contract highs. New crop soybeans are again attempting to break through the $14 barrier for the fourth time in the past 40 days.
Argentine corn and soybean planting progress remains 15-20% behind the average. Argentine corn rating improved 4% last week and is now rated 18% good/excellent vs a 54% average this time of year and the soybean good/excellent rating is only 11% vs 54% average. Brazilian corn planting pace is similar to last year and ahead of the 5-year average and soybean planting progress right in line with the 5-year average.
French soft wheat conditions remain historically strong with a 97% good/excellent rating.
The near-term Argentine forecast remains mostly dry leaving about 50% of their growing area vulnerable. Brazilian weather remains mostly beneficial throughout 80% of their growing regions.
Wheat belt dryness will ease as the Pacific Northwest and northern plains are slated to receive productive snowfall soon.
Trafigura, one of the largest independent oil traders, announced a net profit of $7 billion this past fiscal year. This beat their last three years of profit combined.
November was the 20th consecutive month in which the rate of inflation outpaced the growth in hourly wages, so expect the FED to continue raising rates. More than 1/3 of people polled told Fidelity they have less money than a year ago due to inflation and a record number of Americans are making emergency withdrawals from their 401(k). One interesting signal showing consumer struggles: used Tesla prices. Used prices are down 15% ($11,500 on average) in just the last 90 days.
Crude oil has had its worst couple weeks in quite some time, losing almost 20% of its value since early November. Oil is currently trading around $70/barrel compared to around $130/barrel following the initial excitement of the Russian invasion. The average national gas price is down to $3.41/gallon. This is lowest its been since February and 32% below the all-time highs in June. The Nebraska average is $3.11/gallon.
Mortgage rates are cooling as housing demand continues to fall. The 30-year average is 6.33%. Google new home searches were down 12.6% in November. Data from September showed home prices fell for the third straight month. Data is not yet available for October and November. Every city in the Case-Shiller 20-city index showed declining values during August and September. This has not happened since December 2008/January 2009. A median income family would need to spend 46% of their income to purchase a median value house. When the housing bubble peaked in February 2007, housing prices initially dropped 26%. A similar decline this time around would put houses back to September 2020 levels. San Francisco homes are -10.5% from their peak in May.
Something that Probably Means Nothing:
66% of Gen Z (ages 10-25) and 53% of Millennials (ages 26-41) would rather have TikTok than any cable or streaming service.