In our monthly newsletter, we strive to bring you the key insights from the latest WDSE report. We summarize the most notable events and analyze their potential impact on the markets, providing you with valuable information that can be beneficial for your decision-making. We hope you find this content helpful!



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Corn Market Remains Weak as US and World Supplies Exceed Expectations

The world is flush with corn. USDA pegged US ending stocks at 2.172 billion bushels, slightly above the January report and near equal to the trade's expectation.

World production estimates were being eyed the most due to recent hot weather in Argentina and adverse conditions across Brazil. Argentina's corn output at 55.0 million metric tons was left unchanged, and USDA dropped Brazil's corn output to 124.0 mmt. from 127.0 mmt. World ending stocks were appraised at 322 million metric tons, below USDA's January estimate of 325.22 mmt. That was one of the only friendly nuggets in the report. Futures pricing ultimately traded along its recent lows, with nearby delivery hovering near $4.30 per bushel, and new crop pricing holding around $4.70.

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Soybean Market Faces Oversupply and Export Challenges Despite Higher Futures

USDA reminded market participants that the world has more soybeans on hand than thought a month ago. USDA put US soybean ending stocks at 315 million bushels, above its January estimate of 280 million.

The slow pace of US exports is keeping stocks elevated. World ending stocks are pegged at 116 million metric tons, slightly higher than the January estimate of 114.60 mmt. Brazil’s production estimates were lowered by a million metric tons to 156.0 mmt., despite local estimates calling for larger reductions. USDA left Argentina's soybean output unchanged at 50.0 mmt. Soybean futures did manage to close higher following the report, but price rallies will likely be capped by increased global yields and slow farmer selling.

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US Ethanol Production Stays Strong Despite Lower Forecast and Unchanged Corn Usage 

US ethanol production remains healthy. For the week ending January 20, ethanol production totaled 1.03 million barrels per day, up 3.3% year over year.

Output was above the pace needed to reach USDA’s corn usage forecast of 5.37 billion bushels. Despite the strong grind, USDA opted to keep its corn usage projections for ethanol unchanged in the February WASDE report. Separately, the U.S. Energy Information Administration reduced its forecast for 2024 fuel ethanol production in its latest outlook. The EIA currently predicts fuel ethanol production will average 1.01 million barrels per day this year, down from last month’s forecast for 1.02 million barrels per day.  

Soybean Crush and Fuel Oil Production Hit Record Highs in December

Earlier this month USDA reported December’s soybean crush totaled 204 million bushels, increasing 2% from a month earlier and over 9% from December 2022. Renewable fuel oil produced from soybeans rose to 2.38 billion pounds, up 2% from November and 8% from the same month a year earlier. Record crush production will continue to provide ample meal supplies to the US protein buyers, and the recent trend in futures pricing to $350 per ton reflects these fundamentals.

China's Stock Market Surges Amid Economic and Demographic Challenges

A short-term spark? On Tuesday, the Chinese stock market jumped 3.23%, the largest rally in two years. The move followed government efforts to prop up the equities market. China’s regulatory agency directed traded companies to boost investor confidence and market stability. This adds to stimulus efforts aimed at propping up banks and other financial institutions. 

But all is not well, especially in the real estate market. January home sales dropped 34% from a year ago, the lowest sales since July 2020. Recently, China’s largest property developer, Evergrande, was ordered into liquidation by a court. This sector is proving to be a very hard part of the economy for the government to turn around. 

Long-term demographic trends aren’t in China’s favor either as the nation reached a new low birthrate. The National Bureau of Statistics said the total births dropped 5.7% to 9.02 million in 2023, a record low. A negative population growth rate will limit future economic growth and pressure the fiscal solvency of pension and health systems.

Milk Market Rises on Cheese and Butter Demand, but Faces Uncertainty and Volatility

Milk prices rallied over the last month. Cheese prices rose on notes of strong export demand and decent domestic sales. But exports in the past have been spot opportunities, not long-term deals, limiting upside price momentum to a few short weeks or months. 

Softness in current prices may be the harbinger of that correction for Class III milk. Butter prices jumped higher following a bullish Cold Storage report noting the largest butter stock decline from November to December in 20 years. Additionally, recent retail scanner data indicated butter sales running hot – gaining over 5% compared to the same week last year. With US milk production continuing to contract, powder production is down nearly 20% year-over-year, providing longer-term support to Class IV milk prices.

Jordan Miller: 419-692-3206

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Pat Kahle: 517-260-8295 or

Protect Your Downside

Given current market conditions, the Ever.Ag Feed Foundations Team recommends putting strategies in place to protect your downside. If you’re locking in high prices, consider buying inexpensive puts underneath. Please contact Jordan Miller or Pat Kahle who can direct your questions to the appropriate advisor to discuss specific strategies.

This monthly report is brought to you by Ever.Ag’s Feed Foundations Team. The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. By law we must state the information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.

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