It is widely believed that the U.S. farmer is heavily unsold on this year’s production. Market data suggests most farmers have marketed less than 25 percent of their new crop bushels. The question in the market now is when farmers will increase their selling. Many analysts believe it will take a higher flat price to encourage movement, and this is likely correct. For many farmers across the U.S., their next sales may be determined by time as they will need to generate income prior to or just after year end. This is especially the case when producers start booking next year’s inputs. We are also at the stage of the marketing year where producers need to make a “sell or store” decision on open bushels that were delivered during harvest.

Buyers across the U.S. know there is a large volume of open bushels to purchase and are willing to keep coverage hand to mouth until movement does increase, especially with a lack of heavy competition from the export market.

The International Grains Council has released their updated world grain production estimates, raising them on both corn and wheat. The IGC is now projecting a world corn crop of 1.223 billion metric tons this year, an increase of 4 million metric tons from their last projection. The group’s world wheat crop projection is at 787 mmt, up 2 mmt from a month ago. Better growing conditions in many of the world’s leading grain production areas is the primary factor for the larger estimates, as was the increase in U.S. corn production in the November WASDE report.

There is a story developing in the U.S. livestock market that bears monitoring. The tightening economy in the United States has started to impact what consumers are spending their money on, and this includes red meat, mainly beef. Beef values at the retail level have rallied considerably recently and we are now starting to see consumers push back on their purchases.

At the same time, retailers are reporting very good margins. Normally in a time of consumer contraction you would see a retailer lower costs to encourage demand. At the present time retailers are willing to sell less product at a higher margin as they feel this is generating the same amount of revenue with less exposure. This is pushing consumers to other sources of protein, mainly poultry.

The question now is whether retailers will have the same opinion following the holiday season when consumer demand tends to soften.

One of the most watched developing stories in the market recently has been the newly elected president in Argentina and how his economic policies may impact agriculture. Newly elected President Javier Milei has long stated he wants to tie the peso to the dollar, which would increase export values on ag products. The question is what this change, if it takes place, will have on the markets overall. It is quite likely this may cause an increase in soybean production as that is the commodity that Argentina exports the most of. This is especially the case on soy oil and meal.

What a shift in currency policy may do is have more of an impact on when Argentine farmers market their crops as they will no longer have to monitor exchange rates, they will simply be able to market inventory when futures dictate.

Chinese officials have announced the country is starting to push for more renewable diesel fuel production. The Chinese government is going to launch a series of pilot programs that will encourage both production and usage of biodiesel to further reduce the country’s dependence on imports of all goods. China has trailed countries such as the United States and members of the European Union in both biodiesel manufacturing and consumption. China has already increased its imports of used cooking oil for this process and will likely need to elevate its vegetable oil imports as well. If this is successful it will add oilseed demand to an already large consumption outlook.

The U.S. hog complex is concerned with a recent Chinese statement that its sow herd is still too large and needs to be trimmed. Pork production in China has increased and dropped pork values in the country 42 percent from a year ago. To reach the country’s projected sow herd another 1.1 million head need to be culled which will only add more pork to an already oversupplied market. China will likely reduce its pork imports moving forward, adding to the U.S. pork supply. This move may also reduce China’s feed grain import volumes.

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