Market Briefs | December 12, 2024

Corn
Corn markets saw a bullish turn with the latest USDA data revealing significant adjustments. U.S. ending stocks were slashed by 200 million bushels to 1.738 billion, falling 165 million below expectations. Exports were raised by 150 million bushels, while ethanol usage increased by 50 million bushels. Globally, corn stocks dropped nearly 8 million metric tons to 296.4 mmt, well below expectations of 303.6 mmt, driven primarily by reduced U.S. inventories. Notably, China lowered its 2024 corn production forecast by 3.2 mmt to 293.4 mmt, citing excessive rain, though this remains slightly above the USDA's 292 mmt estimate. While South American production estimates were unchanged, Brazil saw a surge in ethanol demand. March 2025 corn futures reached a two-month high, testing the upper range of $4.20-$4.50.

Soybean
This month's WASDE presented a neutral outlook for soybeans, with U.S. ending stocks unchanged at 470 million bushels, aligning with expectations. Global stocks saw little change, reaching 131.9 mmt, slightly below projections. Argentine production was revised up by one mmt to 52 mmt, while Brazil's estimate remained steady at 169 mmt. In South America, weather conditions are mixed, with excessive rain causing isolated flooding in southern Brazil, while Argentina anticipates a drying trend. Chinese customs data revealed November soybean imports at 7.15 mmt, down 10% year-over-year but contributing to a cumulative 2024 import total of 97.1 mmt, up 9.5%.

Wheat
A neutral to slightly supportive outlook for wheat, with U.S. ending stocks reduced by 20 million bushels to 795 million, coming in slightly below expectations. Imports increased by five million bushels, while exports rose by 20 million bushels. Global wheat stocks remained largely unchanged at 257.9 mmt, in line with expectations. Russian and EU export estimates were each reduced by 1 mmt, while Ukraine's exports were raised by 0.5 mmt. Weather forecasts indicate bitter cold moving into Ukraine, southern Russia, and Kazakhstan, though adequate snow cover should protect crops from major damage. In the U.S., central regions face a brief cold snap midweek, followed by a rapid warmup and continued dry conditions for the Plains and Western Corn Belt. Despite tight global stocks among exporters, wheat markets may require a catalyst for a short-covering rally.

Rice
The December outlook for the 2024/25 U.S. rice market shows no changes to overall supply and use, but notable by-class export adjustments. Long-grain exports were reduced by 2.0 million cwt to 72.0 million due to sluggish demand from Mexico and other Latin American markets. Meanwhile, medium- and short-grain exports increased by 2.0 million cwt to 28.0 million, supported by strong shipments to Japan and South Korea. The season-average farm price remains steady at $15.60 per cwt. Globally, 2024/25 rice supplies decreased slightly to 712.8 million tons due to lower beginning stocks and typhoon-related production losses in the Philippines. World consumption declined fractionally to 530.3 million tons, while trade reached a record 58.1 million tons, driven by larger exports from key Southeast Asian producers. Ending stocks fell modestly to 182.5 million tons, with India accounting for most of the increase over last year.

Cotton
The 2024/25 U.S. cotton balance sheet includes modest revisions, with production increased by 64,000 bales to nearly 14.3 million. The national yield estimate rose by three pounds to 792 pounds per harvested acre, reflecting higher yields in the Southeast and Delta regions but lower yields in the Southwest and West. Ending stocks were raised to 4.4 million bales, resulting in a stocks-to-use ratio of 34%. The season-average upland farm price remains unchanged at 66 cents per pound. Globally, 2024/25 projections show higher production, consumption, and ending stocks, with marginally lower beginning stocks. World cotton production increased by 1.2 million bales to 117.4 million, driven largely by a 1-million-bale increase in India. Additional gains are expected for Argentina, Benin, and Brazil, while Mali and Burkina Faso see declines. Global consumption rose by 570,000 bales, with growth in India, Pakistan, and Vietnam offsetting reduced use in China. Exports increased by 80,000 bales, with notable gains for Brazil and Benin. Ending stocks rose by 267,000 bales to reflect increases in Argentina, the U.S., and Pakistan, despite reductions in Brazil.

Livestock, Poultry & Dairy
The USDA's December forecast for 2024 red meat and poultry production shows increases in beef and poultry output, offset by reduced pork and egg production. Beef production is raised on higher slaughter rates and heavier weights, while pork production declines due to lighter weights. Broiler and turkey production rose on updated data, but egg production dropped due to HPAI-related culling. For 2025, beef and pork production forecasts are lowered, reflecting Mexican cattle import restrictions and lighter pork weights. Broiler production rises, but turkey and egg forecasts remain constrained by HPAI. Trade forecasts for 2024 and 2025 show higher beef imports and broiler exports, while pork exports decline due to reduced supply. Prices are mixed: cattle and hog prices rise, turkey and egg prices increase with tighter supplies, and dairy prices fall due to weaker cheese and butter markets. The 2025 all-milk price is projected at $22.55 per cwt.