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WEEKLY ECONOMY, COMMODITY & ENERGY REPORT: December 27^th 2024.

OVERVIEW

The CME price of corn for March delivery was up 3.7 percent compared to the quotation last week. Soybeans were up 0.6 percent and soybean meal up a disproportionate 8.0. Corn and soybean prices were influenced by domestic demand and firmer projections of crop size from sequential harvests in Brazil and Argentine. There was minimal response to the December WASDE Report incorporating actual harvest values. Farmers should now have sold the remainder of the old crop to make room for the completed 2024 harvest and are actively selling the new crop to avoid further declines in price despite rises this past week. There was some technical selling arising from geopolitical concerns and in response to revised projections for harvests in South America. Contributory pricing factors included ongoing disruption in shipping in the Red Sea and Gulf of Aden, carryover from the 2023 U.S. crop, export orders and the predicted ending stocks of corn and soybeans from the 2024 crop. The 2024 harvest, was in advance of the five-year average. Both crops apparently have superior condition as compared to 2023. The transition from a neutral phase to a La Nina event is underway and will intensify during the remainder of the fourth quarter but has had no effect on the 2024 harvest. The December WASDE, incorporated actual yields and harvest volumes, with USDA updates for anticipated exports, domestic use and carryover for the 2024 crop.

At 12H00 on December 26^th the CME corn quotation for March delivery was up 3.7 percent to 454 cents per bushel. Corn price was influenced by exports, acreage harvested, ethanol demand and the ending stock from the 2023 crop. Farm selling continues with a trend of declining prices despite the recent rise. USDA estimated that 44 percent of old corn stock was held on farms at the beginning of September. Export orders for the current market year have increased in response to lower prices and for some importers to avoid future tariffs. Volumes and price are indirectly influenced by wheat availability as influenced by weather affecting the Black Sea wheat and corn crops. Orders by China resumed at the end of the 2022-2023 market-year and continued through November despite an increase in the Dollar Index, adding to increased ocean freight. Total exports for the 2024-2025 market year are 25.9 percent above the corresponding weeks of the previous market year.

Soybeans were up 0.6 percent over the week for March delivery, priced at 995 cents per bushel and continuing under the 1,000-cent threshold. Low prices over past weeks are attributed to the projection of ending stock, farm selling and taking into account recent export orders and projections of availability from the 2024 U.S., Brazil and Argentine harvests. Total exports for the 2024-2025 market year are 23.3 percent higher than for the corresponding weeks of the previous market year.

Soybean meal was priced at $312 per ton for March delivery, up a noteworthy $23 per ton from last week. Price is influenced by demand coupled with a reestablished high crush volume since September restoring the processing trend to the first half of 2024. Price will fluctuate to reflect the CME price for soybeans and the depressed demand for biodiesel due to oversupply and the consequential adverse financial situation in this sector. The market previously responded to the increased 2023 crop and higher stocks together with projections for 2024 in the December WASDE Report.

On December 26^th at 13H00 EDT the price for WTI was $69.90, down $0.60, (-0.9 percent) from last week. Current price is not materially affected by uncertainties and tensions in the Middle East. Over the longer term price reflects moderate world demand for crude as economies and especially that of China have retracted, requiring central bank stimulation in late August. It is evident that U.S. production is a moderating influence on World price, attaining a record average of 13.4 million barrels per day over the third quarter with ample reserves. There was only small fluctuation in the price of WTI through December 18^th with the range during the week extending from a low of $69.80 on December 26^th up to $70.08 on December 8^th.

Ample U.S. crude production is constraining domestic and international prices. The recent decline in energy costs during the past three months contributed to deflation.

Economic data released during the past quarter (Q3 GDP; PCE, Confidence, Productivity, Employment) confirm a growing economy but with a downward trajectory in inflation. Third quarter GDP was confirmed to be 2.8 percent consistent with preliminary projections. The FOMC decided on a 25 basis point reduction in the 10-year rate on December 18^th. Federal Reserve Chair Jerome Powell indicated one or possibly two additional reductions would be considered in 2025 with the FOMC exhibiting flexibility given uncertainties with the policies of the incoming Administration. The August and September Non-farm Payrolls and labor data clearly indicated the danger of prolonging the high benchmark interest rate that was negatively impacting the U.S. economy. The Federal Reserve is now addressing employment as a priority over containing inflation supported by higher jobless claims in recent weeks.

Macroeconomic U.S. factors:-

• Most economists in academia and the private sector accept that the U.S. economy has achieved a “soft landing”. This is despite the release of the Q3 2024 increase in GDP of 2.8 percent, down from 3.0 percent in Q2 but considering trends in recent economic parameters including the ECI, CPI and PPI. Annual inflation as measured by the headline PCE declined from 8.9 percent in June 2022 to 2.1 percent in September 2024. This is in part a response to a series of 11 FOMC rate raises followed by eight pauses that curbed inflation and cooled the labor market but without precipitating evident unemployment. There is obvious stability in the bank sectors in both the U.S. and Europe. Lower energy prices are contributing to deflation.
• The Federal Reserve lowered the benchmark interest rate by 0.25 percent at the December 18^th. FOMC meeting. Previously the benchmark was lowered by 0.5 percent at the FOMC meeting on September 18^th, the first of a series of actions after eighth sequential pauses. The Fed lowered the rate by a further 25 basis points on November 7^th as anticipated. Chairman Powell in Congressional testimony, and at the post-meeting press conference and also documented in FOMC minutes indicated that future decisions would be based on demonstrated progress in reducing inflation and confirmed by a basket of key economic data, towards an annual 2.0 percent target sometime in late 2025 or early 2026.
• The December 19^th release by the Bureau of Economic Affairs documented Q3 2024 GDP at 3.1 percent upgrading the preliminary figure of 2.8 percent. The Q3 GDP compares to 3.0 percent for Q2 and 2.9 percent for entire 2023. The GDP in Q3 was supported by increased exports and higher consumer spending, especially on non-durable goods.
• The December 11^th release of the Consumer Price Index (CPI) for November showed a 0.3 percent rise over October and an annual increase of 2.7 percent consistent with prior estimates. The annual value is compared to 2.6 percent for the 12 months preceding October. Core CPI (excluding food and fuel) was up 0.3 percent in October with an annual increase of 3.3 percent, unchanged from October. Food at home was up 0.1 percent for October and 1.1 percent over 12 months. In reviewing annual values, the category of Shelter was up 4.7 percent. Food Away from Home was up 3.6 percent, accounting for half of the inflation during the year. Among the Food components, Meat, Fish and Eggs were up 3.8 percent compared to cereals down 0.5 percent and diary up 1.2 percent. Notwithstanding the increase in CPI during November a reduction in benchmark interest rate is anticipated at the December FOMC Meeting.
• On December 20^th the Bureau of Economic Analysis released the Personal Consumption and Expenditure Price Index for November. The core PCE (excluding food and energy) was up 0.1 percent from the previous month, and attained 2.4 percent year-over-year. The Headline PCE was up 0.1 percent from November and 2.8 percent from November 2023, a 43-month low and consistent with projections. Food and energy were up 0.2 percent from October. Food was up 2.4 percent over 12-months The headline PCE is closely followed by the Federal Reserve and confirms that inflation is progressively moderating but still above an annual target of 2.0 percent.
• The November Producer Price Index for Final Demand (PPI) released on December 12^th rose 0.4 percent from October above an expectation of 0.2 percent. This was attributed in part to a 0.7 percent increase in the Goods category. Food was up 3.1 percent due to rises in meat, poultry and eggs collectively amounting to 2.6 percent over the year and a 0.3 percent increase in food. The PPI was up 3.0 percent over the past 12-months ending in November compared with 2.4 percent for the 12-month period through October. This is compared to a 6.4 percent increase in 2022. The core PPI value excluding volatile fuel and food, was up 0.2 percent from October and 3.5 percent over the previous 12 months.
• A Federal Reserve release on December 17^th confirmed that industrial production was lower by 0.1 percent in November less than the decrease of 0.3 percent in October. Capacity utilization was lower at 76.8 percent compared to 77.1 percent for the previous month and was 2.9 percent below the long run 1972-2020 average.
• The November 27^th report by the Department of Commerce, Census Bureau on Durable Goods Ordered during October 2024, orders increased by 2.5 from the previous month. Shipments were up 1.8 percent. Excluding the Transportation component, new orders in November increased by 0.1 percent. Excluding the Defense category new orders were up by 0.4 percent compared to October.
• In a December 4^th release the Census Bureau confirmed that factory orders for U.S. manufactured goods increased 0.2 percent in October and compared to a revised fall of 0.5percent in September. Shipments of manufactured goods were up 0.2 percent in October.
• The November 15^thS. Census Bureau release of the advanced estimate of retail and food sales data for October was up 0.4 percent from the revised September value of a 0.8 percent increase and up 2.8 percent over 12 months. Food service sales were up 0.1 percent from September and up 2.7 percent over 12 months. Grocery store sales were up 0.1 percent from the revised September value ($75,793 million) and up 2.5 percent over the past 12-months. The Federal Reserve FOMC closely monitors retail sales as a measure of the trend in inflation.
• The December 2^nd release by the Institute for Supply Management (ISM®) reported a higher Manufacturing Index for November at 48.4 compared to the October value of value of 46.5. The November value was still below the bifurcation point of 50 percent between contraction and expansion. The November Prices Index rose to 50.3 points in November compared to 54.8 points in October, denoting lower values for goods produced. U.S manufacturing now reflects an improved economy, with manufacturing recovering from prolonged high benchmark interest rates. The November Production Index was 46.8 points compared to 46.2 in October.
• On October 31^st the U.S. Bureau of Labor Statistics reported a 0.8 percent increase in the Employment Cost Index (ECI) over the 3^rd quarter of 2024. The year-over-year increase in wages and salaries was 3.9 percent and with benefit costs up by 5.8 percent. The ECI is closely followed by the Federal Reserve FOMC and this data justified in part the 50 basis point drop in the benchmark interest rate in September and strengthens the possibility of additional rate cuts.
• The December 23^rd Consumer Confidence Report prepared by The Conference Board for December, recorded a substantial decline to 104.7 from the revised November value of 112.8, with all segments down. The Present Situation Index measuring perceptions of current business conditions fell 1.2 points to 140.2 in November. The Expectations Index declined 12.6 points from a revised November value to 81.1. Values below this threshold over consecutive months and with a downward trajectory are regarded as predicting a recession.
• The December 20^th University of Michigan Index of Consumer Sentiment for November rose to 74.0 from the final November value of 71.8 and is compared with a value of 69.7 in December 2023. The Current Economic Index was 75.1 in December, up from 63.9 in November. The Index of Consumer Expectations was 73.3 down from 76.9 in November, denoting a deterioration in consumer sentiment despite three consecutive cuts in the benchmark rate amounting to 100 basis points and with lower inflation. Geopolitical factors and uncertainty over the economic policies of the incoming Administration have influenced sentiment in divergent directions depending on political persuasion. In perspective sentiment is 6.2 percent above December 2023.
• Non-farm payrolls added 227,000 positions in November, as documented by the Bureau of Labor Statistics in a December 6^th This was up 191,000 from the revised October value of 36,000 impacted by Hurricanes and strikes. The unemployment rate increased to 4.2 with 7.1 million unemployed and with 1.7 million in the long-term category. The real average hourly earnings value for all employees in during November was $30.57. Average hours worked for all employees was unchanged at 34.3 hours per week. Labor participation was at 62.5 percent, 0.1 percent lower than October. Wage rates increased 4.0 percent over 12-months. Wage rates are closely followed by the Federal Reserve FOMC.
• The Bureau of Labor Statistics Job Openings and Labor Survey report (“JOLTS) released on December 3^rd estimated 7.744 million job openings at the end of October, up by 372,000 from the revised September value of 7.372 and above the forecast of 7.480 million. The October job openings number was up 5.2 percent over 12 months. The peak job openings figure was 12.2 million in March 2022 during COVID. The October hiring rate was 3.3 percent (5.3 million hires); the October total separation rate was 3.3 percent (5.3 million); the quit rate 2.1 percent (3.3 million); and the layoff rate 1.0 percent, down 0.1 percent from September at 1.6 million.
• The seasonally adjusted initial jobless claims figure of 219,000 released on December 26^th for the week ending December 21^st was down by 1,000 from the value of 220,000 for the previous week and the lowest value since May. The weekly value was lower than the WSJ estimate of 223,000. The four-week moving average rose to 225,500. The Bureau of Labor Statistics estimated 1.910 million continuing claims for the week ending December 13^th (up 46,000 from the revised value for last week), and compared to a peak on November 27^th 2021 at 1.93 million. The November unemployment rate advanced to 4.2 percent. There is clear evidence from data over the past three months that the labor market is cooling as confirmed by Chairman Powell in Congressional testimony and release of downward revised figures for job creation. The jobs market is still tight, but with sporadic weekly fluctuation in new claims due to weather, strikes or scheduled plant shutdowns.
• The December 10^th Bureau of Labor Statistics report confirmed the 2.2 percent increase in non-Farm Productivity for Q3 2024. Labor cost increased by 1.9 percent compared to 0.9 percent for Q2 2024. Output was up by 3.5 percent.
• The ADP® reported on December 4^th that private (excluding government data) payrolls decreased to an unexpected 146,000 in November, down 42,000 from the revised 188,000 in October and compared to a consensus estimate of 166,000 jobs. This confirmed a slowing in the labor market withy employers reluctant to hire new workers and staff. The increase in employment was mostly in the service-related sectors with +15,000 positions. Individual categories included the Transportation, Trade and Utilities sector, (+28,000); Construction, (+30,000); Hospitality, (15,000); and Professional and Business Services, (+18,000); Information (+4,000). Manufacturing was down -26,000. Annual pay was up 4.8 percent year-over-year for ‘job-stayers’. The increase as reported by ADP will not directly influence the probability of short-term future changes in interest rate since the number, although based on 25 million positions, excludes the public sector. Monthly ADP data is regarded as less reliable by the FOMC than the Bureau of Labor Statistics Monthly non-farm payroll report.

STATUS OF THE 2024 CROP

As of November 15^th both the soybean and corn crops were harvested with a confirmation of yields and volume as incorporated in the December 10^th WASDE Report

December WASDE #655 confirmed:-

• Corn area planted for all purposes in 2024 (‘new crop’) attained 90.7 million acres. According to the November WASDE, yield was projected at 183.1 bushels per acre with a resulting record production of 15,143 million bushels with 1,738 million bushels as ending stock. The USDA held the average ex-farm price at 410 cents per bushel for the 2024 crop.
• Soybean area planted in 2024 attained 87.1 million acres. According to the December WASDE, yield was estimated at 51.7 bushels per acre with production of 4,462 million bushels with 470 million bushels as ending stock. The USDA reduced the average season price to 1,020 cents per bushel.
• Crushers are expected to produce 56.75 million tons of soybean meal in 2024. Ending stocks will attain 450,000 tons. The USDA reduced the average season price at $300 per ton.

The preference for planting soybeans in 2024 was based on a favorable projection of the soy to corn benefit ratio despite lower prospects for exports but with higher domestic demand for crushing.

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FACTORS INFLUENCING COMMODITY PRICES

• According to the National Oceanic and Atmospheric Administration (NOAA) the La Nina event in progress will result in warmer and drier conditions on the Central and Southern Plains. It is projected that 52 percent of the wheat crop will be impacted by drought. In contrast heavier than usual rainfall will occur in the Great Lakes and Ohio Valley regions benefitting crop growth and ensuring uninterrupted passage on the Mississippi waterway.

• Rainfall in areas of the World growing corn and oilseeds especially in Brazil and Argentine have turned dry with transition to a La Nina event that is now underway. Harvesting in South America was advanced for the “new” crop of 2024 but was disrupted by flooding in the southern production states mainly affecting Rio Grande do Sul where up to 25 percent of crops may have been lost. It is estimated that the corn harvest will be reduced by 10 million metric tons (370 million bushels) across South America. Planting in many areas of Brazil is delayed by dry weather.

• Geopolitical considerations continue to move markets, especially in the Mideast and Baltic regions. Previously attacks on Ukraine port facilities impacted prices of wheat, corn, oilseeds and vegetable oils. Loaded bulk vessels are sailing from Black Sea and Danube River ports using the ‘Humanitarian Corridor” to various destinations. This route is operational despite unrealized threats by the Russian Federation to mine the entrance to ports and deployment of airborne missiles.

• Before the October deadline for expiry of Federal funding the Speaker of the House negotiated passage of a continuing resolution (vote; 341 to 82), extending through December 20^th 2024, only 16 days away. Since the General Election resulted in narrow Republican majorities in both the House and the Senate a more productive 119^th Congress is anticipated.

• The delayed 2023 Farm Bill is still mired in conflict in both the House and Senate of the 118^th Congress with involvement from the President-elect. Despite the respective markup of the House and Senate versions there is no consensus on major issues comprising the magnitude of SNAP payments and eligibility, allocation of funds for climate remediation and requested price supports for crops. According to the non-partisan Congressional Budget Office, the House version contain provisions for farm supports that would be $31 billion higher than projected by the Committee, adding to the National debt. The retiring Chair of the Senate Agriculture Committee Sen. Debbie Stabenow (D-MI) is standing firm on maintaining both SNAP-WIC benefits and climate remediation. In a recent statement Sen. Stabenow averred that the Farm Bill is “stuck” absent bipartisan concessions. This sentiment for delay is now supported by Glenn Thompson (R-PA) Chair of the House Agricultural Committee. There are now questions whether funding will be available for substantial crop support payments included in the House version, especially in view of potential trade wars.. Former Secretary of Agriculture, Gov. Mike Johanns previously expressed doubt as to whether any farm Bill will be enacted by the 118^th In contrast USDA Secretary, Tom Vilsack predicted passage of a Farm Bill during the post-election ‘lame duck” session now underway, a seemingly impossible prospect as the version released by the Senate Agriculture Committee on November 19^th is regarded as a non-starter.

• The December 10^th WASDE #654 Projected both corn and soybean production parameters with a record harvest for the 2024 corn crop with favorable quality. There will be ample world availability of ingredients although inequitable distribution will result in shortages in some nations. Soybean exports will comprise 37.9 percent of the 2024 U.S. crop with an ending stock of 470 million bushels. The projection of corn exports will amount to 14.6 percent of the 2024 crop with ending stocks down 13.1 percent from the November Report to 1,738 million bushels.

• Soybean production in Brazil will attain 169.0 million metric tons (6,209 million bushels), up 1.7 percent from the 2023-2024 market year. Projected export volume will be 105.0 million metric tons (3,858 million bushels) or 62 percent of production.
• Corn production in Brazil for the 2024-2025 market year will attain 120.0 million metric tons (4,717 million bushels) as estimated by CONAB (the production association in Brazil), from all three sequential harvests. Brazil is projected to export of 41 million metric tons (1,614 million bushels).
• Soybean production in Argentina over the 2024-2025 market year is projected at 52 million metric tons (1,910 million bushels) up 5.1 percent from the previous market year.
• Corn production in Argentina over the 2024-2025 market year is projected at 51 million metric tons (2,008 million bushels). The crop will be down 11 percent due to lower acreage planted following drought and crop disease during the previous market year. Corn exports will amount to 36 million metric tons (1,417 million bushels) or 70 percent of production.
• The 2024 wheat crop from Russia will be down 11.8 percent from 2023 to 80.7 million metric tons. This is due to severe weather during winter followed by drought. The Ukraine wheat crop will attain 22 million metric tons in 2024, unchanged from 2023. Deficits in production will place upward pressure on prices for coarse grains.

• During 2024 Ukraine will produce 25 million metric tons of corn (984 million bushels) of which 18.3 million metric tons (720 million bushels) has been harvested. The Nation will produce 18.8 million tons of oilseeds (soy, canola and sunflower) equivalent to 690 million bushels, of which the majority has been harvested. The USDA estimated that total production of grains and oilseeds will decline from 82 million metric tons in the 2023/2024 market year to 74 million metric tons during the present year.

• The Dollar Index (DXY) attained 108.1 at 12H00 EST on December 26^th, unchanged from last week and the highest level since October 3^rd The increase reflects recent U.S. economic data and is subsequent to three reductions in the benchmark interest rate amounting to 100 basis points. The DXY has ranged from 100.4 to 108.2 over the past 52 weeks. The dollar index influences timing and volume of export orders and indirectly the price of WTI crude despite a trend to de-Dollarization in international trade.

• On December 26^th conversion of the CNY to the BRL was BRL 0.85, up CNY 0.01 from last week. The conversion of the CNY to the US$ was CNY 7.14, up CNY 0.16 from the previous week despite the prevailing high Dollar Index.

INGREDIENTS

The following quotations for the months of delivery as indicated were posted by the CME at 12H00 on December 26^th 2024, compared with values at 12H00 on December 19^th 2024 (in parentheses) for delivery in 2025: -

Changes in the price of corn, soybeans and soybean meal over four trading days this past week were:-

Corn: March delivery up 16 cent per bushel. (+3.7 percent)

Soybeans: March delivery up 6 cents per bushel (+0.6 percent)

Soybean Meal: March delivery up $23 per ton (+8.0 percent)

The CME spot prices for feedstuffs per short ton at 12H00 on December 26^th 2024 with prices for the previous week were:-

• Corn (ZC): $162 per ton, up $6 (+3.9 percent) from the previous week. 52-week range $135 to $181
• Soybean Meal (ZM): $312 per ton, up $25 per ton (+8.7 percent) from the previous week. 52-week range $330 to $461

For each $1 per ton (2.8 cents/bushel) change in corn the cost of egg production would change by 0.11 cent per dozen

For each $10 per ton change in the price of soybean meal the cost of egg production would change by 0.35 cent per dozen

The nest-run production cost for eggs this past week, was up 1.5 cents per dozen compared to December 18^th due to higher prices for corn and soybean meal.

The weekly USDA release covering the week ending December 20^th documented values for common ingredients with prices for short tons:-

• Meat and Bone Meal: According to the USDA National AnimalBy-product Feedstuffs Report on December 20^th:-
• Porcine range: $280 to $345 with an average of $315 per ton, (ex MN) unchanged for two weeks;
• Ruminant range: $300 to $310 per ton (Av. $305 per ton) (ex MN) Unchanged from last week

Prices vary according to plant of origin and location 

• Wheat Middlings: According to the USDA National Mill-Feeds andMiscellaneous Feedstuffs Report on December 20^th, consignments from Louis, MO. and other Midwest locations: $165 to $185 per ton (Av. $175 per ton) up $6 per ton (+3.6 percent) from the previous week.

• DDGS: According to the National Grain and Oilseed Processor Feedstuffs Report on December 20^th DDGS, (IA.): range was $125 to $155 (Av. $141 per ton), down $3 per ton (-2.1 percent) from last week despite slightly higher corn prices. The average Pacific Northwest price was up $4 per ton from the previous week at $252 per ton. Price varies according to plant and location and is expected to fluctuate with the price of corn.

• Miscellaneous: University of Missouri Extension Service By-Product Feed Price Listing for November:-
• Bakery Meal, (MO & TX): $153 per ton. (USDA)
• Rice Bran, (AR & CA): $140 to $160 per ton. (Av. $152).

The CME soybean price for March 2025 delivery at 12H00 on December 26^th was up 0.6 percent compared to last week at 995 cents per bushel. The current price of soybeans is a reflection of availability for domestic crushing to produce oil, domestic consumption and export orders. Soybean meal was up 8.0 percent to $312 per ton for March 2024 delivery. Prices of soybeans are obviously influenced by projections of harvests in the three major producing nations in South America, the projected 2024 harvest in the U.S. coupled with domestic demand for soy oil, biodiesel and meal.

According to a release on October 16^th by the National Oilseed Processors Association, whose membership crushes 95 percent of the U.S. crop, the soybean crush for November 2024 was down 3.4 percent from the October record to 193.19 million bushels of soybeans. The consensus estimate was for 196.71 million bushels. The November crush was down 0.5 percent from the November 2023 value of 189.0 million bushels due to inactivity in a major Des Moines IA plant. The combined and realistic crush capacity of 64 plants reporting to NOPA is 6.71 million bushels per day or 203 million bushels per month.

On December 26^th the CME spot price for soybean oil was up 0.2 cents per lb. (+0.5 percent) from the previous week to 40.0 cents per lb. Prices for vegetable oils have fluctuated over a narrow range in past weeks but the declining trend is attributed to lower demand for biodiesel and cooking oils.

Malaysian palm oil was 45.3 cents per lb. on December 26^th, down 1.5 percent over the past week and up 21.1 percent year-to-date. It is anticipated that 41 percent of U.S. soy oil was diverted from fuel to biodiesel during 2023 and that this proportion will be exceeded in 2024 paralleling the situation in Brazil.

EXPORTS

The FAS Export Report for corn, released on December 27^th for the week ending December 19^th, covering the 2024-2025 market year, confirmed that outstanding export orders for corn amounted to 23.28 million metric tons (916.26 million bushels). Net orders for the past week attained 1.71 million metric tons (67.34 million bushels). Shipments recorded during this week amounted to 1.12 million metric tons (44.24 million bushels), cumulatively 25.9 percent higher than for the corresponding weeks of the previous market year 2023-2024. Outstanding sales for the 2025-2026 market year are 0.86 million tons (33.85 million bushels) with a nominal 10,000 metric tons (3.94 million bushels) ordered this past week

(Conversion 39.36 bushels per metric ton. Quantities in metric tons rounded to 0.1 million)

The FAS Export Report for soybeans covering the week ending December 19^th, recorded outstanding export orders amounting to 12.94 million metric tons (475.42 million bushels). Net orders this past week attained 0.98 million metric tons (35.93 million bushels). Shipments attained 1.57 million metric tons (57.79 million bushels), cumulatively 23.3 percent higher than the corresponding weeks of market year 2023-2024. Outstanding sales for the 2025-2026 market year amount to 144,200 metric tons (5.30 million bushels), with 125,000 metric tons (4.59 million bushels) ordered this past week.

 (Conversion 36.74 bushels per metric ton)

For the week ending December 19^th outstanding orders for soybean meal and cake amounted to 4.66 million metric tons for market year 2024-2025. Net orders this week for soybean meal and cake attained a net 389,000 metric tons. During the past week 292,100 metric tons of meal and cake combined was shipped. For market year 2024-2025 outstanding sales attained 103,000 metric tons with 96,000 metric tons ordered this past week.

ENERGY

Due to the Christmas holiday data for week ending December 20^th was not released before publication. was not

A recent U.S. Energy Information Administration (U.S. EIA) report estimated that fuel ethanol blending would average one million barrels per day in 2024, up 2.0 percent from 2023. For the week ending December 6^th, 95.8 percent (93.5 percent for the previous week) of the U.S. ethanol fermentation volume was operational, based on the most recent January 2023 U.S. EIA capacity of 1,152 million barrels per day. The outlook for increased production will depend on higher domestic demand, from a seasonal increase in driving and the availability of E15 blend. There are limited prospects to increase the quantity exported comprising approximately 12 percent or the production equivalent of less than four days operation based on August shipments.

During September 2024 (the last month for which US Energy Information Administration data is available) ethanol exports were up 4.9 percent from the previous month to 150 million gallons (3.545 million barrels). Importing nations and regions of significance and their proportions of total volume (rounded) for the month included:- 43.7 percent to Canada; 26.6 percent to Europe; 10.9 percent to Central, South America and the Caribbean; 14.1 percent to Africa, Asia and the Middle East, predominantly India, Philippines, Oman and Singapore; 4.6 percent to Mexico. Brazil with a high demand for fuel ethanol placed a tariff on U.S. imports to protect a growing domestic industry based on sugar cane. This nation imported a token 1,000 barrels in August, the first since May 2024.

According to the U.S. EIA, for the week ending December 13^th 2024 the industry produced on average 1,103,000 barrels of ethanol per day, up 2.3 percent from the week ending December 6^th and continuing above the one-million gallon per day benchmark.

On December 13^th ethanol stock was down less than 0.1 percent to 22.64 million barrels, an approximately 22-day reserve. This past week demonstrated higher demand for ethanol, due to holiday driving, and given relative changes in the weekly production level (output up 2.3 percent and inventory down less than 0.1 percent for the most recent week)

Current Energy Prices:-

The price of WTI was down $0.60 per barrel, (-0.9 percent) to $69.90 per barrel compared to the past week at 13H00 EST on December 26^th. The small decrease reflects stable to falling demand with an anticipated delay in a planned increase in OPEC output. WTI is down 0.7 percent year-to-date with an extreme range of $64.38 (September 11^th) to $87.15 (April 15^th) per barrel. Issues affecting price last week included a decrease in the conflict premium for Middle East crude following a reduced threat of retaliatory attacks on oil installations in Iran. Increased tension over the war between Ukraine and Russia is an issue of growing concern. Disruption of shipping in the Red Sea continues, resulting in an escalation in bulk and liquid sea-freight. Fewer reports of attacks are attributed to multinational deterrence of Houthi terrorists but mostly to a reduction in vessels transiting the waterway to and from the Suez Canal through the Bab el Mandeb Strait. Reduced demand from China is evident.

• On December 13^thS. strategic reserve (SPR) was up 0.2 percent to 393.1 million barrels and up 11.5 percent year-to-date with a nominal storage capacity of approximately 700 million barrels. In 2009 a total of 725million barrels was stored. The ending stock of crude held at Cushing OK. on December 13^th was up 0.8 percent from last week to 23.00 million barrels and 36.7 percent down from the previous 2024 high on May 17^th. Hydrocarbon energy contributed materially to inflation during the third quarter of 2023 but was an important factor in deflation over the fourth quarter through to the present.
• On December 20^th Baker Hughes reported 589 rigs were in operation in the U.S. unchanged since December 6^th suggesting consistent exploration and compared to 620 during the corresponding week in 2023.
• Average U.S. crude production will average 13.3 million barrels per day in 2024. There is little prospect of increases in output of hydrocarbon fuels in 2025 despite Federal incentives and relaxation of restrictions on exploration.

ENERGY PRICES

• Ethanol quoted on the CME (EH) on December 26^th was priced at $2.16 per gallon, unchanged for months due to lack of trading activity. The 52-week range is $2.14 to $2.19 per gallon.

• On December 26^th RBOB gasoline traded on the CME (RBF) at $1.96 per gallon, up 1 cent (+0.5 percent) from the previous week. Despite the lower prices in past weeks, escalation might occur in the unlikely event that crude rises in the intermediate term. The 52-week range for RBOB gasoline is $1.87 to $2.81.

• The AAA national average regular grade gasoline price was $3.04 per gallon on December 26^th, up 1 cent (+0.3 percent) from last week. Gasoline at the pump is $0.88 per gallon more expensive than ethanol but has a 63 percent higher BTU rating. Future stability in fuel cost is anticipated given the prospects for a continuing low benchmark WTI price and the end of the hurricane season.

• The AAA national average diesel price was $3.51 per gallon on December 26^th unchanged for two weeks but with prospects for future increases due to an extremely low national stock and reduced refinery operation. Increases are currently restrained by a decline in the trucking industry.

• CME Henry Hub natural gas was priced at $3.31 per MM BTU on December 26^th down 11 cents (-3.2 percent) from the previous week on lower demand. Generally colder weather and higher industrial use raise price. The Administration embargo on new LNG export terminals has limited exploration but the situation will be reversed in 2025.

EXPORT HISTORY

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95.0 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

For the 2022-2023 market year net export sales of soybeans were down 5.6 million metric tons (206 million bushels) compared to the previous market year with cumulative exports of 51.5 million metric tons (1,893 million bushels).

For the 2024-2025 market year accumulated exports of corn have attained 14.75 million metric tons (580.36 million bushels) up 25.9 percent from market year 2023-2024. For the 2024-2025 market year accumulated exports of soybeans attained 26.75 million metric tons (982.6 million bushels) up 23.3 percent from market year 2022-2023.

For Market year 2024-2025, 3.44 million metric tons of soybean meal and cake has been exported up 12.4 percent above the corresponding period in market year 2023-2024. Expansion in exports was attributed to orders from The E.U., Asia (especially Viet Nam) and Latin America. Crush volume was driven by the demand for soy oil to produce biodiesel fuel.

During calendar 2023, 46.0 million metric tons (1,810 million bushels) of corn were exported from the U.S., valued at $13,140 million. The top five importers with their respective values expressed as a percentage were:- Mexico, 40.9; Japan, 15.8; China, 12.5; Colombia, 8.6 and Canada, 5.1.

During calendar 2023, 49.0 million metric tons (1,800 million bushels) of soybeans were exported from the U.S., valued at $29,910 million. The top five importers with their respective values expressed as a percentage were:- China, 50.6; E.U., 12.0; Mexico, 9.3; Japan, 4.3; Indonesia, 4.1; Taiwan, 2.0 and Egypt, 1.6.

COMMENTS

Subscribers are referred to the USDA projections included in the December 10^th WASDE #655,under the STATISTICS tab.

Either more intense action by Ukraine, a negotiated peace treaty with concessions to the Russian Federation, or their combination will be required to restore unrestricted shipping in the Black Sea. Increasing passage along the costal-route (“Humanitarian Corridor”) has allowed sea-transport of commodities since early August to supply Asia and Africa. Pre-invasion Ukraine exported 6 million tons of grains and oilseeds each month. After a drastic reduction exports in 2023, by July 2024 volume increased to 4.2 million metric tons. Over the past 12-months about 2,050 vessels transported 39 metric tons of agricultural commodities with the Port of Odessa now handling 80 percent of exports. 

Increased multinational naval and aerial activity is ongoing in the Bab al-Mandeb Strait to restore shipping through the Red Sea and the Suez Canal that carried 15 percent of world sea-freight. Nearly all shipping lines including Maersk of Denmark, Hapag-Lloyd of Germany and CMA of France have suspended transit of the Suez Canal and the Red Sea awaiting a clear resolution of the danger from missiles. Traffic through the Suez Canal is down over 70 percent from mid-September 2023 creating a fiscal problem for Egypt. Restoring free passage will require either destruction of Houthi bases, radar and command installations and mobile launching equipment on the soil of Yemen or action by Iran to constrain their proxy forces. This is in progress but may be a long process.