In the world of commodities trading, overnight activities often hold significant implications. Recent reports suggest that wheat futures saw a notable increase in overnight trading. This surge was driven by the concerning condition of a sizable percentage of Russia's crops. As stated by Andrey Sisov, the managing director of SovEcon and author of The Sizov Report, about 37% of Russian grain, primarily wheat, is in poor condition. This marks the highest level in at least a decade, compared to just 4% at the same time last year.

Unraveling the Dynamics of Commodity Markets

Wheat Futures: Overnight Trading Insights

The rise in wheat futures overnight on the Chicago Board of Trade is a significant development. March delivery futures rose 4 1/4¢ to $5.52 1/2 a bushel. This increase is not only influenced by the poor condition of Russian wheat but also by adverse weather in Australia, the world's fourth-largest wheat exporter. Excessive rain in major growing areas has led to quality issues for the country's bumper crop. Despite this, the U.S. Department of Agriculture forecasts Australian production in the 2024-2025 marketing year to increase from 26 million tons to 32 million metric tons. Exports are also expected to rise from 20 million tons in the 2023-2024 marketing year to 25 million metric tons.In addition to the Chicago Board of Trade, Kansas City futures also saw an upward trend. March delivery futures rose 4 1/2¢ to $5.47 a bushel. This shows the widespread impact of these market factors on different trading locations.

Ethanol Production: From Record High to Decline

The data from the Energy Information Administration reveals a notable shift in ethanol production. After reaching a record high, output fell in the seven days ending on Nov. 29. Production declined to an average of 1.073 million barrels a day last week, down from a record 1.119 million the previous week and the lowest level since Oct. 11. In the Midwest, output averaged 1.014 million barrels a day, showing a decrease from 1.048 million the week prior and reaching the lowest production since Oct. 18. Gulf Coast production plunged from 34,000 barrels a day to 22,000 barrels a day. East Coast output remained steady at 12,000 barrels a day for a third straight week, and Rocky Mountain production was unchanged at 15,000 barrels a day for the fifth consecutive week. Only the West Coast saw a gain, with output rising to an average of 10,000 barrels a day from 9,000 barrels a week earlier. Ethanol inventories also increased during this period, totaling 23.003 million barrels, up from 22.869 million the previous week and reaching the highest level since Sept. 27.

Heavy Snow in Western Michigan: A Weather Alert

The National Weather Service has issued winter storm warnings for eastern Michigan due to heavy snow and intense winds that are curbing visibility. Heavy snow is expected to continue throughout the day and well into tonight, with forecasts of up to 8 inches of snow in the area. Winds will gust up to 45 mph, causing visibilities to drop below a quarter mile due to falling and blowing snow. This strong wind and the weight of snow on tree limbs may lead to downed power lines and sporadic power outages. In central Indiana, winds will be sustained at 20 to 30 mph with gusts up to 55 mph expected. Wind chills are forecast to plummet to as low as minus-5 degrees Fahrenheit overnight.

The California Department of Public Health has announced that a Fresno dairy has recalled all of its unpasteurized whole milk and cream products due to "multiple bird flu detections in the company's milk and dairy in the past week." This comes as the Centers for Disease Control confirmed the 32nd human case of bird flu in the state on Wednesday.

Raw Farm Milk and Bird Flu

The state health department has stated that raw farm milk products have tested positive for bird flu at both retail and dairy storage and bottling sites in the past week. The voluntary recall covers all containers of raw farm milk and cream produced from Nov. 4 to 27. It's important to note that no human cases of bird flu have been linked to these products.

New Case of Bird Flu

State officials have revealed that the new case of bird flu was someone with dairy cow exposure. Interestingly, all but one of California's cases have been dairy or poultry workers with direct exposure to infected animals. The CDC reports that 58 people in seven states have contracted bird flu since the disease was first identified in dairy cattle in Texas in late March.

Bird Flu in California Herds

According to a USDA database, bird flu has been confirmed in 493 dairy herds in California, including 12 on Tuesday. There are approximately 1,100 herds in the state. Nationwide, the disease has been identified in 707 herds in 15 states. This shows the widespread nature of the bird flu outbreak.

Impact on Domestic Flocks

Since the H5N1 avian flu virus appeared in the United States in February 2022, more than 112 million birds in domestic flocks have died of bird flu or in efforts to prevent its spread. The most recent outbreaks include a broiler chicken farm with 237,100 birds in Fresno County, central California, on Tuesday. These outbreaks represent the largest animal disease event in U.S. history.