Grain Gleanings

'Tis the Season

By Jeff Moritz, Lead Grain Merchandiser

The grain markets didn’t seem to be much in the Christmas Spirit this week as Corn lost about 3 cents and Soybeans gave away about 32 cents. In fact it seems that the markets want to engage in the Season of Festivus. For those that aren’t fans of the Classic Sitcom Seinfeld, Festivus was a holiday featured in an episode during the Christmas Season. Festivus is a secular holiday, an alternative to the pressures and commercialization of the Christmas season. One of the traditions during Festivus is the ‘Airing of Grievances.’ As George Costanza’s father blurted at the Supper table, “I have a lot of problems with you people and you’re gonna hear about it.”

In this case it is the grain markets with which I am taking issue and the ways they have disappointed as of late especially Soybeans. Negative headlines permeated the trade as Guidance on 45Z Clean Fuel Production Credit continues to be delayed. Trade is concerned that soy crush margins could be impacted negatively if the US Treasury fails to issue regulations on biodiesel as the credit expires by the end of the year. The trade is putting more focus on a Brazil Soybean crop that looks like it could be near 170MMT or more of production. However, Soybeans are oversold short term on the charts and could be poised for a bit of a recovery soon. However, take advantage of opportunities to market any unpriced soybeans on decent price strength or rallies.

Corn on the other hand has shown ‘Feats of Strength’ this week (Another Festivus Term) even as Soybeans disappointed. Corn’s demand story is keeping it in good spirits and supported price wise. Like soybeans it could use guidance on 45Z legislation to keep demand well supported going forward. Corn used for Ethanol Production is still running slightly above the USDA’s newly increased estimate in the December WASDE Report. Export Shipments remained strong this week and on a better pace need to achieve the USDA estimate in the December WASDE Report. The Corn market, however, could be held back from much of a rally above $4.55- $4.65 March futures, without getting some assistance from the soybean market. That price level seems like a good target to market additional corn bushels for the moment.

in other news this week, US legislators wrestled this week with passing a stop gap spending Bill in an effort to keep the Government Open. Included in the Bill is the Farm Act which is a temporary extension of the current Farm Bill while new Farm Bill legislation awaits passage. There is a provision for $10 billion in economic assistance for eligible producers. Details on how those payments will be distributed will be announced at a later date.

If you want to discuss marketing plans or just ‘Air Your Grievances’ with the grain markets, please reach out to your local CFC originator and they would be happy to have a conversation. As always, we genuinely appreciate your consideration in doing business with CFC and wish you a Merry Christmas and Happy New Year!

12/20/2024

Grain Update

By Jake Moret, Grain Originator

I would like to start this article off by reminding everyone that we don’t price any grain until we are told to do so by the farmer. The only time during the year grain gets priced by us automatically is at the end of the pricing date which is Oct 3, 2025. If we can’t get ahold of you with basis or futures contracts at expiration they will be rolled at the current market value. I can’t stress enough to utilize our offer system post making futures/basis contracts to get them priced, especially since offers are a FREE tool!   

A few things making news in the market right now is the ban of Mexican feeder cattle into the US, very poor Russian wheat crop and biofuels waiting on tax credits for SAF and other low-carbon biofuels. The next thing we will be working on is calling customers to figure out if you’re going to take or defer money this year so be expecting those phone calls starting now.  

12/6/2024

The Three T's

By Matt Morog, Grain Department Manager

President-elect Trump picked Brooke Rollins as his Agriculture Secretary. She has a history with Trump serving in his administration last go around. She will inherit a $430 billion yearly budget and will be responsible for the next four years of policies and programs. I don’t expect any major policy changes in agriculture as I think the administration is going to be focused on other areas of policy. What could come into play though is what is to be done if tariffs and tax credits have a major negative impact on the rural economy.

Tariffs have been a major focus this election cycle and how Trump will impose them to bring other to the negotiation table. What’s not said is that many Trump implemented were still in place during the Biden admin. No one is certain who and to what extent tariffs will be utilized but there will be some obvious retribution from countries such as China who is our major bean buyer. Much like in 2018 it could have a very detrimental impact to bean exports. China’s growing bean and meal demand is already slowing down due to economic conditions in the country. If Brazil can pull some strong crops together our exports will look sluggish. Our export window is already very narrow and limited to when our cash price delivered China is more expensive than Brazil, so I’d argue that not much will change.

The bigger impact I think we will see will come from our domestic renewable/biodiesel tax credit program. This program as of today is set to expire on Dec 31, 2024. With the uncertainty on future programs blenders are not buying any renewable or bio past the new year. This current $1.00/gallon credit was set up during the Inflation Reduction Act of 2022 but is full of holes as it allows for the importation of used veg and cooking oil from Asia. It would be my hope that the next program solves this problem and forces blenders to buy North American made products.  

11/27/2024

Central Farmers has a mobile app that provides real time account information at your hands. By partnering with barchart, we are able to empower you, our producers, to make informed and quicker business decisions with CFC. With our app you can:

• Access scale tickets virtually in real time, allowing you to know how many bushels you have delivered and how much still needs to be delivered. You are able to see the grade factors on each scale ticket such as Moisture and Test Weight.
• Access your contracts that you have with any CFC location. You will be able to see the status of any contract to find out whether it is filled or is still open.
• Access real-time bushel balances of your grain across all CFC locations.
• Access delayed cash bids for all of our CFC locations

You can find our App on Google Play for Android devices or the App Store for iPhones by searching for Central Farmers. Scan the QR code below for quicker download process. Download it today!