Market Perspectives – January 11, 2024

Chicago Board of Trade Market News


Weakness in crude oil futures (down more than 3% on Monday) set the tone for early week trade as the CME grains opened lower on Monday and then fell quickly to the lowest level in 3 years for corn and to the lowest level in 2 years for soybeans. Tuesday was a “turn-around” day with wheat and oats showing the most strength and corn and soybeans rising on short-covering. Early trade estimates of final 2023 U.S. corn and soybean production hit the wires on Monday with corn production expected to be 80 million bushels less than the November estimate on a reduction in harvested area and soybean production expected to be 50 million bushels lower than the November estimate with slightly higher harvested acreage. The average early trade estimate on Dec. 1 corn stocks is 12.05 billion bushels which would be up 11.4% from a year earlier and would be the largest Dec. 1 corn stocks since 2017. Wheat stocks are expected to be up from a year ago, but soybean stocks are expected to be down 1.5% from a year ago.

U.S. crude oil and natural gas output is set to notch fresh records in 2024 and 2025 with average U.S. oil production predicted to be 13.2 million barrels per day this year, rising to 13.4 mn b/d next year, according to the Energy Information Administration. Dry natural gas production is set to rise to an unprecedented 105 billion cubic feet per day in 2024 and 106 billion cu ft/d in 2025. Ethanol production is near record levels and expectations are that USDA will increase corn use for ethanol in Friday’s report.

The market will closely be watching multiple USDA reports set to be released on Friday, January 12. This includes the WASDE, crop production, and December grains stocks. For corn average trade expectations include yield of 174.9 bushels per acre, production of 15.226 billion bushels, and U.S. ending stocks of 2.105 billion. Yields expectations are unchanged from USDA’s previous estimate while production and endings stocks are slightly lower.