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Grain Markets and Other Stuff

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Futures and options trading involves risk of loss and is not suitable for everyone.
🌱 Soybean Market Rally
Soybean oil futures have played a significant role in a recent rally in the soybean market. The December bean oil contract gained 4.3% on Thursday after a 3% increase on Wednesday. This surge is attributed to expected policies from a Trump administration that may lead to greater domestic usage of soybean oil, especially with anticipated tariffs on imports of used cooking oil and Brazilian sugar ethanol.
Soybean futures also saw a sharp increase, with the January 2025 contract gaining nearly 23 cents per bushel.
🇨🇳 China's $1.4 Trillion Stimulus Package
China announced a $1.4 trillion stimulus package aimed at local governments facing "hidden" debt strains. This move is seen as an effort to counterbalance the negative impacts of previous stimulus measures, particularly those from the 2008 global financial crisis. Traders had largely anticipated such measures to stabilize the economy.
🌾 USDA Crop Production Estimates
Preliminary estimates from the USDA indicate an increase in corn acreage for next year, projected at 92 million acres, up from 90.7 million this year.
Soybean acreage is forecasted to decrease to 85 million acres from 87.1 million, while wheat plantings are expected to remain stable at 46 million acres.
The combined acreage for corn, soybeans, and wheat is anticipated to fall to a three-year low.
📊 Upcoming USDA Reports
The USDA's monthly Crop Production and WASDE report is set to be released today at 11:00 AM CST. Expectations include marginal downward revisions to corn and soybean yield estimates, which could lead to slight reductions in carryout estimates. Analysts believe demand estimates for corn, particularly for ethanol and exports, might be too low.
🌍 Strong U.S. Export Sales
U.S. corn export sales reached 2.8 million metric tons (109 million bushels), surpassing expectations and marking an 18% increase from the previous week.
Net soybean sales were reported at 2 million metric tons (75 million bushels), down 10% from last week but up 10% from the previous four-week average, with China being the largest buyer. Net wheat sales stood at 374,700 metric tons (14 million bushels), with Mexico as the top buyer.
🌧️ Drought Monitor Update
Recent rainfall has improved drought conditions in many areas of the Corn Belt, especially in Missouri, Iowa, and Wisconsin. However, drought conditions worsened in parts of Kentucky, Ohio, and Michigan.
Current drought status:
Corn: 71%
Soybeans: 63%
Winter Wheat: 57%
Spring Wheat: 41%
Cattle: 54%
📉 Corteva Shares Decline
Shares of Corteva plummeted by as much as 7% to $57.45 due to a lowered earnings outlook, driven by planting issues in Argentina caused by stunt disease and dry weather. Despite the decline, the company's stock is still up about 20% year-to-date.
💵 Federal Reserve Rate Cut
The Federal Reserve cut interest rates by 0.25% on Thursday, a decision that was unanimously approved and anticipated by markets. Fed Chair Jerome Powell stated the cut aims to strengthen the economy and labor market while addressing inflation. There is speculation that another quarter-point cut may come in December, followed by a pause in January to assess the effects of current monetary policies.