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Agriculture

3 December 2024: Soybean, Corn, Wheat Market Updates & Snow Forecast

2024-12-10

In the world of commodity trading, soybean and grain futures have been experiencing some interesting movements. Overnight trading saw soybean futures moderately higher, while grains took a dip. This comes as investors are squaring positions ahead of the USDA's monthly World Agricultural Supply and Demand Estimates (WASDE) report, which is expected to be uneventful.

Stay Informed on Soybean and Grain Market Trends

Soybean Futures: A Mixed Picture

During overnight trading on the Chicago Board of Trade, soybean futures for January delivery gained 2 3/4¢ to $9.92 3/4 a bushel. Meanwhile, soymeal added $2.30 to $291.90 a short ton, and soybean oil was down 0.69¢ to 42.11¢ a pound. These fluctuations highlight the dynamic nature of the soybean market.There is anticipation surrounding the USDA's November projections for soybean inventories. According to a Reuters poll, soybean inventories at the end of the 2024-2025 marketing year on Aug. 31 are likely to be forecast at 469 million bushels, slightly lower than the previous projection of 470 million bushels.

Grains: A Tale of Contrasts

Corn futures for March delivery fell 3/4¢ to $4.41 a bushel. Corn stockpiles at the end of August are expected to be seen by the USDA at 1.906 billion bushels, down from the previous outlook of 1.938 billion bushels.Wheat futures also showed some movement. For March delivery, wheat futures lost 3 1/4¢ to $5.55 1/4 a bushel, while Kansas City futures were down 3 1/4¢ to $5.55 1/2 a bushel. Wheat inventories at the end of the grain's marketing year on May 31 are likely to be pegged at 814 million bushels, compared to the month earlier projection of 815 million.

Weekly Corn Inspections: A Sign of Activity

Inspections of corn for overseas delivery have shown an improvement week to week. In the seven days through Dec. 5, corn inspections rose to 1.05 million metric tons, up from 948,812 tons a week earlier and significantly above the 725,330 tons assessed during the same week last year. This indicates a growing demand for corn in the international market.Since the start of the marketing year on Sept. 1, USDA has inspected 12.1 million metric tons of corn for overseas delivery, which is a notable increase from 9.19 million tons during the same timeframe last year.

Wheat and Soybean Inspections: A Mixed Trend

Inspections of soybeans for export fell to 1.62 million tons, down from 2.11 million tons the week prior. However, it still remains above the 999,790 tons inspected at the same point in 2023. This shows a slight slowdown in soybean exports but still maintains a relatively healthy level.Examinations of wheat since the start of the grain's marketing year on June 1 are now at 11.2 million tons, up from the 8.63 million tons assessed at this point in 2023. This indicates a positive trend in wheat inspections.

Snow Showers in Nebraska and Iowa

According to the National Weather Service, scattered snow showers are forecast for parts of eastern Nebraska and western Iowa this afternoon. The snow may last into the overnight hours, with winds expected to gust close to 40 mph and visibility dropping to less than a mile. Accumulations are expected to amount to an inch or two.The weather service warns that "Snow amounts will generally remain under an inch, though could quickly accumulate and make roads slick." In addition to the snow and strong winds, temperatures will quickly fall well below freezing later this evening, potentially resulting in flash freezing of roadways that don't see snow accumulations initially.

The highly pathogenic avian influenza has made significant waves in Iowa this year. Just days after its detection in an egg-laying flock in Sioux County, it was also found in a commercial turkey flock in Palo Alto County. This fifth detection of the H5N1 influenza virus by the Iowa Department of Agriculture and Land Stewardship on Sunday has led to important measures being taken.

Unraveling the Spread of Avian Influenza in Iowa

First Detection in Sioux County

The Iowa Department of Agriculture and Land Stewardship's announcement of the first detection of HPAI in a commercial egg-laying flock in Sioux County was a significant event. This marked the beginning of a series of events that would have a major impact on the poultry and dairy industries in the state. Since spring 2024, the avian flu has also appeared in dairy cattle, affecting nearly 60 humans who have come into contact with infected animals. However, it's important to note that the consumption of poultry and egg products remains safe, as well as the consumption of pasteurized dairy products.

These detections have raised concerns among poultry producers who are now encouraged to exercise heightened biosecurity measures. They are advised to contact their veterinarians immediately if they suspect any signs of the H5N1 virus. The state and local agencies are working hard to track and contain the avian influenza, with the governor's proclamation allowing them to utilize state resources. This proclamation, which expires on January 7, is a crucial step in addressing the issue.

Detection in Palo Alto County

The detection of the highly pathogenic avian influenza in a commercial turkey flock in Palo Alto County just days after the Sioux County case was a major development. It shows the widespread nature of the virus and the need for continued vigilance. The Iowa Department of Agriculture and Land Stewardship's announcement of this new case highlights the importance of proactive measures to prevent the spread of the virus.

Poultry producers in both counties are now facing the challenge of implementing enhanced biosecurity measures to protect their flocks. This includes strict hygiene protocols, restricted access to farms, and increased monitoring of animals. The veterinarians play a crucial role in providing guidance and support to these producers during this difficult time.

New Mandatory Dairy Testing Program

The U.S. Department of Agriculture's announcement of a new mandatory dairy testing program for the avian flu on December 6 was another significant development. While Iowa is not immediately included in this program, it highlights the growing concern about the spread of the virus to dairy cattle. The testing program is an important tool in monitoring the spread of the virus and taking appropriate measures to protect the dairy industry.

Poultry and dairy producers alike are closely watching these developments and working together to ensure the safety of their products and the well-being of their animals. The collaboration between state and local agencies, as well as the veterinary community, is crucial in addressing this complex issue.

Iowa Capital Dispatch, part of States Newsroom, is committed to providing accurate and timely information about the avian influenza outbreak. With editorial independence, they are able to bring you the latest updates and insights. Contact Editor Kathie Obradovich at info@iowacapitaldispatch.com or follow them on Facebook and Twitter for more information.

Farm equipment sales are facing a significant slowdown, closely mirroring the downturn in farm income. This situation is creating a challenging headwind for overall U.S. investment activity, as detailed in the Beige Book, which summarizes economic conditions in Federal Reserve Bank districts. In the realm of agriculture, the St. Louis Fed noted that some businesses were proactively building inventory in anticipation of potential tariffs on imported goods.

Unraveling the Impact of Farm Equipment Sales on the Economy

Farm Equipment Sales and the Downturn

Farm equipment sales are slowing alongside the decline in farm income. This has a direct impact on overall U.S. investment activity. The Beige Book highlights this trend, showing how it is affecting different regions. In some areas, like the St. Louis Fed's district, businesses are taking proactive measures to prepare for potential tariffs. Lower commodity prices and high production costs are pulling down net farm income for the second year in a row. This is a significant concern for the agricultural sector.Farmers are facing challenges as farm equipment values are declining. The Kansas City Fed reported that "conditions in the farm economy remained subdued and many contacts cited declines in farm equipment values as a growing concern." This is a clear indication of the difficulties faced by the agricultural industry.

The Impact on Farm Equipment Manufacturers

The Association of Equipment Manufacturers reported that sales of farm tractors were down by nearly 14% and combines by 23% so far this year compared to 2023. This is a significant decline and has a direct impact on the manufacturers. The Chicago Fed noted that "farm equipment sales this fall 'were slow given falling prices for trade-ins and sticky high prices on new equipment.'" This shows the complex dynamics at play in the farm equipment market.

Farm Bill Delays and Uncertainty

Delays in enacting the new farm bill are a major concern. Congress is expected to extend current law for a year to allow time to work on a farm bill during 2025. However, there is uncertainty about the new farm bill in light of the upcoming change in administration. Farmers are worried that needed safety net programs could be held up. In the mid-South, the St. Louis Fed reported that "uncertainty about the passing of the next farm bill, high borrowing rates, and potential disruptions in international trade were the main concerns of farmers." These disputes over crop subsidies, cuts in SNAP, and access to climate mitigation funds have led to a deadlock in the progress of the farm bill.

Agricultural Conditions in Different Regions

In the northern Plains, agricultural conditions remained weak. The Minneapolis Fed reported that "farm income expectations for 2024 continued to be for a decline from 2023, as corn and soybean prices remained below year-ago levels." This shows the continued pressure on farmers in this region.The Kansas City Fed noted that above-average yields per acre for corn and soybeans "could boost revenues, but profit opportunities stayed narrow." This highlights the complex nature of the agricultural economy, where higher yields do not always translate into increased profits.The Dallas Fed said that lower crop prices put a strain on farmers while benefiting livestock producers, who feed grain to their animals. This shows the interconnectedness of different sectors within the agricultural industry.