Marketing

The following marketing analysis is for the week ending Dec. 2. CORN — Markets were fairly volatile to start in the week after the Thanksgiving holiday with corn trading sideways until mid-week when it broke through support.

Various news items popped up which influenced our commodity prices. Least of all was the U.S. House’s passage of a bill to avoid a railroad strike which could have occurred on Dec. 9. The House passed a bill that will force the labor unions and the railroads to accept the tentative contract brokered in part by the White House that was reached in September. Since PHYLLIS NYSTROM the tentative agreement, four CHS Hedging inC. labor unions had rejected the St. Paul proposal with ongoing negotiations. The House also passed a separate bill that would tack on seven paid sick days. The Senate passed the first bill, but did not pass the additional paid sick time bill. How this plays out over time remains to be seen. The union is said to be unhappy about it since the sick time was not included and a strike was their bargaining chip to get it included. For now, no strike is on the horizon.

The Environmental Protection Agency released the proposed Renewable Fuels Standards this week. The announcement crashed soyoil down the daily trading limit, with soybeans, corn and wheat getting dragged along with it. For corn-based ethanol, the 2023 mandate would be unchanged from previous years at 15 billion gallons and increased to 15.25 billion gallons in 2024 and 2025. Cellulosic biofuel showed the largest increase from 630 million gallons this year to 2.13 billion by 2025! The breakdown would be 720 million gallons in 2023, 1.42 billion in 2024, and 2.13 billion in 2025. Is this realistic? There are naysayers. And for the first time, the EPA is proposing allowing electricity produced from renewable biomass to qualify for Renewable Identification Numbers. The credits would be divided between electricity producers and electric vehicle manufacturers.

There was one new export sales flash this week of 4.5 million bushels to Mexico. Weekly export sales were unexciting at 23.7 million bushels. Total export commitments at 722.5 million bushels are 48 percent behind last year. We need 34.7 million bushels of sales per week to hit the U.S. Department of

corn/change* soybeans/change*

Stewartville $6.04 -.22 $14.22 +.24 Edgerton $6.65 -.21 $14.40 -.12 Jackson $6.49 -.19 $14.52 +.18 Hope $6.41 -.06 $14.23 +.08 Cannon Falls $6.03 -.21 $14.10 +.13 Sleepy Eye $6.37 -.22 $14.50 +.18 St. Cloud $6.02 -.28 $14.35 +.18 Madison $6.23 -.22 $14.50 +.18 Redwood Falls $6.42 -.18 $14.55 +.28 Fergus Falls $6.12 -.18 $14.20 +.18 Morris $6.22 -.22 $14.45 +.18 Tracy $6.39 -.26 $14.45 +.18 Average: $6.28 $14.38 Year Ago Average: $5.59 $12.02

Grain prices are effective cash close on Dec. 6. *Cash grain price change represents a two-week period.

Agriculture’s target of 2.15 billion bushels. Weekly inspections of 11.9 million bushels were the secondlowest of the marketing year and cumulative exports are nearly 33 percent behind last year. We need to average close to 45 million bushels of inspections per week to reach the USDA’s projection. The USDA should begin to cut the export outlook on the next World Agriculture Supply and Demand Estimates report.

Weekly ethanol production was down 23,000 barrels per day to 1.02 million bpd. Stocks rose 100,000 barrels to 22.9 million barrels. Net margins fell 12 cents to 8 cents per gallon. Gasoline demand was 10,000 bpd lower at 8.32 million bpd.

USDA Secretary Vilsack met with Mexico’s President Obrador this week to discuss Mexico’s ban on GMO corn beginning in 2024. Nothing fresh came out of the meeting; but Mexico reiterated the ban is on GMO corn for human consumption, not corn headed for feed. The United States has threatened legal action if the ban violates the USMCA pact. Outlook: March corn broke technical support at $6.50 per bushel this week with eyes now on the gap left in August from $6.38 to $6.38.5 per bushel. It closed below its 100-day moving average support for the first time since Sept. 8 when the soy complex crumbled. On the weekly chart, March corn posted a key reversal lower.

The December WASDE report will be released on Dec. 9 and is expected to finally show a cut to exports, a possible increase in yield, and result in higher ending stocks.

For the week, March corn crashed 25 cents to $6.46.25, July tumbled 20.25 cents to $6.44.25, and December 2023 was 12.75 cents lower at $5.98 per bushel. SOYBEANS — Soybeans jumpstarted the week with a key reversal higher that extended for a couple of days on news China would ease their Covid restrictions after citizens protested in the streets. The easing included allowing people with Covid to quarantine at home and less mass Covid testing. Then the other shoe dropped.

The biggest price impact came from the newly new proposed Renewable Fuels Standards by the EPA. Soyoil closed down its daily trading limit in response to the news and pulled soybean, corn and wheat lower with it. These levels are proposals and will be open to public comment. The final figures are expected by mid-June. The biodiesel mandate for this year was 2.76 billion gallons. For 2023 it’s proposed to increase to just 2.82 billion gallons, to 2.89 billion in 2024, and 2.95 billion gallons in 2025. This year’s biodiesel production is expected to be above 3 billion gallons, so maybe economics vs. mandates will drive the production.

Adding to the soy complex woes was Argentine’s decision to reinstate the special soybean exchange rate. Farmer sales rose after the government made the announcement on Nov. 28 and the rate will run through the end of the year. The new exchange rate is 230 pesos per dollar compared to the official rate of 165 pesos per dollar. The announcement appears to be having the desired effect of prompting grower sales. It’s estimated farmers sold over 44 million bushels this week and China buying six to seven Argentine soybean cargoes for December/January shipment. The government also cut meal and soyoil export taxes by 2 percent to 31 percent vs. the soybean export tax of 33 percent.

South American crops benefited from recent rain events, but heat and dry conditions are forecasted to return to Argentina in the coming week. There has been talk Argentine farmers may switch some soybean acres to later-planted corn due to dry conditions. Brazil’s weather has been favorable, but timely rains will need to continue with high producing areas on the edge of dryness. Mudslides in Brazil closed the road into the port of Paranagua for a couple of days, but it has since reopened without major disruptions to shipping.

Weekly export sales were within expectations at 25.5 million bushels and are at the same level of total commitments as last year. We need to average nearly 18 million bushels of sales per week to reach the USDA’s 2.045 billion bushel export forecast. We

but 89.75 cents above a year ago. There were six sales on the week and 63 for November, up from 58 in October.

Holiday-related cream access continues to keep Midwest butter churning active, says Dairy Market News, and plants were turning away cream offers because they were at capacity. Demand remains despite prices over $2.90 per pound and the late timeframe in regards to the holiday season. Market tones continue to maintain support and contacts view the markets as stable, if not slightly bullish.

Western cream is becoming more available as milk production is improving in the region. Cream availability is outpacing strong demand and contributing to lower cream multiples. Some processors say tanker and labor shortages are making it difficult to obtain and process increased volumes of cream. Butter makers say they are actively churning but labor shortages are preventing some from operating full schedules. Butter demand is strong in the West from both food service and retail. Inventories are available but some tightness persists. Contacts note they are booking loads of butter to ship into first and second quarter 2023.

Grade A nonfat dry milk fell to $1.3475 per pound on Dec. 1 (the lowest since Sept. 16, 2021), but finished Dec. 2 at $1.36. This is 3.75 cents lower on the week and 20.25 cents below a year ago. Sales totaled 10 for the week and 41 for the month, up from 29 in October.

Dry whey saw its Dec. 2 finish at 45 cents per pound, up a penny on the week but 24.75 cents below a year ago. There were two sales on the week and 16 for the month of November, up from six in October.

The October Dairy Products report was issued on Dec. 2 after the markets finished trading for the week. StoneX reminded us that a lot of milkfat went “missing” in August and September and, while it was produced at the farm level, it didn’t show up in the major dairy products.

“We are assuming some of that fat found its way back into the major dairy products in October,” says StoneX, “but may have continued to move directly into retail and foodservice.”

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The Global Dairy Trade’s Pulse auction on Nov. 29 saw 2.2 million pounds of Fonterra whole milk powder sold, up from 2.1 million in the Nov. 22

erases gains erased the rally. January soybeans are NYSTROM, from pg. 22 in a $14.10 to $14.80 per bushel trading range and may be setting up for saw 9 million bushels of new export some consolidation ahead of the Dec. sales flashes this week split between 9 WASDE report. Monitoring Chinese China and unknown. Weekly export demand and South American weather inspections were over 73 million bush- will take over the headlines as the railels for the fifth straight week with 74 road strike was averted. percent of this week’s shipments headed to China. Overall export inspections are 10 percent behind last year. For the week, January soybeans were 2.25 cents higher at $14.38.5, July gained 5.5 cents at $14.58.5, and

The October National Agricultural November 2023 fell 1.5 cents to Statistics Service Oilseed Crush report $13.77.75 per bushel. showed 197 million bushels of soybeans were crushed which was in line with the 196 million bushel trade estimate. Weekly price changes in December wheat for the week ended Dec. 2: Chicago wheat slid 36 cents lower to Outlook: January soybeans traded $7.61, Kansas City dove 41.25 cents to to their highest price since September $8.70.75, and Minneapolis was 28.25 this week but a crashing soyoil market cents lower at $9.21.25 per bushel. ❖ Pulse, and at $3,280 per metric ton, down $25 or 0.8 percent from the previous Pulse. change to be more targeted and effective.”

n Back home, the USDA Don’t look for China to come to the rescue any time soon. China’s announced the fluid milk portion of the solicitation of the Special Supplemental Nutrition global dairy purchases will likely program for Women, Infants, remain limited for the foreseeable and Children. You’ll recall close future as protests mounted across to $1 billion will be spent to the country due to frustration over purchase food for emergency the government’s continuing zero- food providers like food banks. Covid policy of massive lockdowns and quarantine centers. Because the spending is administered through the Emergency Food Assistance program, HighGround Dairy stated, “After whole milk powder found support at the most recent main GDT auction cheese and fluid milk are the only dairy products qualified for purchase. two weeks ago on Nov. 15, the two The solicitation seeks 20.9 million subsequent Pulse events have indicat- gallons or nearly 180 million pounds ed slight price weakness. However, the of milk for distribution in the seven two recent Pulse auction settlements month period from March through remain higher vs. the $3,250 per met- September. Initial calculations show ric ton whole milk powder value at the that this volume equates to less than first November auction.” 1 percent of estimated fluid milk sales Speaking in the Dec. 5 “Dairy Radio Now” broadcast, HighGround Dairy’s during the period, according to HighGround Dairy. Lucas Fuess said demand is pretty Like the cheese solicitation in midweak around the world regarding November, HighGround Dairy stated, products from New Zealand despite “It is of a disappointing volume and continuous news that milk output likely have minimal market impact. there is weaker this season. The small volume, coupled with a sevDon’t look for China to come to the rescue any time soon. China’s global dairy purchases will likely remain lim ited for the foreseeable future as protests mounted across the country due eral month delivery period, will not pull substantial enough product from estimated supply to be bullish, though it may create plenty of noise and volatility throughout 2023.” to frustration over the government’s Fuess added however, that USDA continuing zero-Covid policy of mas- did state it would entertain bids on sive lockdowns and quarantine cen- products other than what USDA is ters. requesting.

There are reports the government n may back off some. HighGround Dairy Congress passed legislation this reports the official newspaper of the week to avert a national railroad Communist Party ran a daring opin- strike. The President, as expected, ion piece suggesting “Covid controls See MIELKE, pg. 24

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signed the measure. Fuess said it was thought that this strike was averted a few weeks ago when the unions and railroad workers reached a tentative agreement but that was ultimately rejected.

National Milk President and CEO Jim Mulhern warned, “A rail strike would bring chaos to agricultural supply chains, as its ripple effects on trucking and other industries would complicate transport of goods everywhere from grocery stores to export markets, all the while adding another cold blast of inflation to consumer expenses this winter as products inevitably become scarce.” n

Back on the farm, the October milk feed price ratio climbed higher for the second month in a row, thanks to a higher All Milk price and lower corn and soybean prices. The USDA’s latest Ag Prices report shows the ratio at 1.92, highest since June, up from 1.74 in September, and compares to 1.84 in October 2021.

The index is based on the current milk price in relationship to feed prices for a ration consisting of 51 percent corn, 8 percent soybeans and 41 percent alfalfa hay. In other words, one pound of milk would only purchase 1.92 pounds of dairy feed of that blend.

The All Milk Price average advanced to $25.90 per hundredweight, up $1.50 from September, and $6.30 above October 2021.

California’s price climbed to $26.60 per cwt., also up $1.50 from September and $7.30 above a year ago. Wisconsin, at $24.40, was up $2.30 from September and $4.70 above a year ago.

The October national average corn price was $6.50 per bushel, down 59 cents from September, after falling 15 cents the previous month, but is still a budget busting $1.48 per bushel above October 2021.

Soybeans fell to $13.50 a bushel, down 60 cents from September, after dropping $1.20 the previous month, but are still $1.60 per bushel above

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Alfalfa hay jumped $4 per ton after gaining $2 the previous month, and averaged $281 per ton in October, another record high, and $62 per ton above a year ago.

Looking at the cow side of the ledger, the October cull price for beef and dairy combined averaged $84.10 per cwt., down $7.10 from September, $13.50 above October 2021, and $12.50 above the 2011 base average.

Quarterly milk cow replacements averaged $1,730 per head in October, up $20 from July, and $390 above October 2021. Cows averaged $1850 per head in California, up $100 from July, and $550 above a year ago. Wisconsin’s average, at $1,840 per head, was down $30 from July, and $390 above October 2021.

Dairy economist Bill Brooks, of Stoneheart Consulting in Dearborn, Mo., says, “October’s gain in the income over feed calculation moved to the highest level since June. Income over feed costs in October were above the $8 per cwt. level needed for steady to increasing milk production for the 13th month.”

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Meanwhile, dairy margins weakened over the second half of November as milk prices slumped while feed costs were steady to higher since the middle of the month according to the latest Margin Watch from Chicago-based Commodity and Ingredient Hedging LLC.

“U.S. milk production grew again in October, marking the fourth consecutive month that milk production increased from the prior year,” the Margin Watch reported. “USDA reported October Milk Production at 18.85 billion pounds, up 1.2 percent from last year with a larger dairy herd and higher yields driving the increase. USDA revised the September dairy herd up by 6,000 head, from the initial assessment of a 2,000 head decline to a 4,000 head increase. October’s dairy herd also increased 1,000 head from September to 9.418 million head. This would be 31,000 head higher than last October when producers were aggressively culling cows with margins under pressure. Yields increased in the Midwest last month due to mild weather while they contracted along the West Coast due to unseasonably hot weather and soaring input costs. Milk production in Texas increased 7 percent in October due to both a larger dairy herd and increased milk yield, eclipsing Idaho to become the third largest milk producing state in the U.S.”

n

The Margin Watch also detailed the October Cold Storage report, pointing out butter stocks saw the smallest year-over-year shortfall in the past 12 months and the draw between September and October was well below the five-year average.

The National Milk Producers Federation reported this week total domestic consumption of milk in all products returned to positive annual growth during third quarter for the first time since early this year.

“Strengthened use of all cheese was a key driver, says NMPF, while U.S. dairy export volumes backed off a bit in third quarter from their record pace in the prior quarter but kept the industry on an almost certain path to set yet another calendar year record. Year-to-date performance through the third quarter was 18 percent of total U.S. milk solids production, up from the current 17.3 percent calendar year record set in 2021.”

NMPF adds, “The United States has clearly resumed increasing milk production after many months of below year-ago levels. Despite this greater supply, dairy product prices, which had been falling in recent months, found a floor and rebounded in some cases during October. Retail price inflation for all items, the categories of food and beverages, dairy products and for most individual dairy products moderated in October from a month earlier.”

The Dairy Margin Coverage program generated a second payment for 2022, of 88 cents per cwt for Tier 1 coverage at the $9.50 per cwt level in September. CME dairy futures and USDA’s dairy outlook currently indicate milk prices will be about $2.50 to $3.00 per cwt lower in 2023 than this year.

Lee Mielke is a syndicated columnist who resides in Everson, Wash. He may be reached at lkmielke@juno.com. ❖

the next trend is may find it here.

The entrepreneur in your life might enjoy unwrapping “Launchpad Republic: America’s Entrepreneurial Edge and Why It Matters” by Howard Wolk and John Landry. Let them know that history agrees with their can-do spirit.

If there’s a new grad or a newlyunemployed-just-looking person on your gift list, look for “Sell Yourself” by Dr. Cindy McGovern and wrap it up. It’s all about making and promoting a personal brand that employers will find irresistible.

The business leader who enjoys looking into the future will enjoy reading “Redesigning Work: How to Transform Your Organization & Make Hybrid Work for Everyone” by Lynda Gratton, a book about how to make away-from-the-office work succeed. Wrap it up with “Competing in the New World of Work” by Keith Ferrazzi, Kian Gohar and Noel Weyrich, a book about “radical adaptability” in business today.

So your giftee is obsessed with The Godfather movies, eh? Well, then, you can’t go wrong if you wrap up “The Godmother: Murder, Vengeance, and the Bloody Struggle of Mafia Women” by Barbie Latza Nadeau. It’s the story of the women behind the men in the mob.

For the person who can appreciate a good true crime tale, “The Forever Witness” by Edward Humes. It’s the story of a double murder that happened in Seattle more than thirty years ago and the trail went cold... until the use of DNA became more common and other technology put the case front-and-center.

Sometimes, the setting of the story is everything. Case in point: “All That is Wicked” by Kate Winkler Dawson. In 1871, Edward Rulloff was awaiting execution for crimes committed – but several people wanted him released because of his intelligence. Was his brain too refined to belong to a killer? Your giftee will be glad to find out... Wrap it up with “Killer Collections: Dark Artifacts from True Crime” by Paul Gambino, a loaded-with-photos anthology of items associated with murder.

Someone on your gift list loves the movies, and half the fun of that is wondering if what’s on the big screen is really possible. So you wrap up “Licence to Kill: The Science of 007” by Kathryn Harkup and collect your smiles. This book looks at all the what-ifs of the Bond movies, from the POV of real science, and no armchair detective will be able to resist.

If you’ve got a gearhead on your list, “Racing Green: How Motorsport Science Can Save the World” by Kit Chapman would make a great gift. It’s the story of how new innovation in our vehicles is saving lives, taking the sting out of commutes, and helping environmental causes.

For the person who hates to exercise, hates eating healthy (let’s face it) and stresses about it all, you can’t go wrong with “The Gospel of Wellness: Gyms, Gurus, Goop, and the False Promise of Self-Care” by Rina Raphael. Doesn’t that title say it all?

No doubt, there’s a giftee on your list who longs for total silence. That’s the person who should have “Golden: The Power of Silence in a World of Noise” by Justin Zorn & Leigh Marz. Wrap it up and watch them open their gift... quietly... It might be right to pair it with “Good Anxiety” by Dr. Wendy Suzuki, about seeing anxiety in a whole new light.

The preschooler who loves polar bears will love getting “A Bear Far from Home” by Susan Fletcher and Rebecca Green. It’s based on the true story of a gift from Norway to England, and the meaning of home.

If you’ve got a young environmentalist on your list, “A Planet Like Ours” by Frank Murphy and Charnaie Gordon, illustrated by Kayla Harren could be a great gift. It’s a sweet, uncomplicated reminder to love the Earth we have.

Seriously, who doesn’t like pizza? You know your young giftee does, and they’ll also like “Pizza! A Slice of History” by Greg Pizzoli. It’s a cute, colorfully illustrated, fun book on everybody’s favorite food. Pair it with a gift certificate to... you know where...

For the kid who loves monsters, “Mythical Beasts” by Stephanie Warren Drimmer could be the right gift to give. It’s full of information about real animals that were somehow mythologized throughout history. Facts, monsters, and it comes from the National Geographic Kids folks... what’s not to love?

If there’s a child on your list who loves legends, then “The Return of the Christmas Witch” by Dan Murphy & Aubrey Plaza, illustrations by Julia Iredale is the book to wrap. It’s the story of Kristtorn, who was Santa’s twin sister, a battle, a mystery, and a bit of Christmas darkness. (No worries. Happy Endings abound).

For the kid who’s suddenly become a big brother or sister, “The BabyChanging Station” by Rhett Miller, illustrated by Dan Santat is absolutely the gift to give. It’s the tale of a boy who isn’t happy that there’s a baby brother in the house, until he discovers a machine that changes the baby, but not in diaperish ways...

The young environmentalist on your list will be so happy unwrapping “Meltdown: Discover Earth’s Irreplaceable Glaciers and Learn What You Can Do To Save Them” by Anita Sanchez, illustrated by Lily Padula. It’s full ideas, information, pictures, and graphs, as well as a sense that kids really can save the world. Wrap it up with “Dinosaur Atlas” from the National Geographic Kids folks. This large-size book is all about dinos and were they lived. Your young scientist will love it.

If there’s a child who loves a good historical fiction tale, then find “The Other Side of the River” by Alda P. Dobbs. It’s the second part of a story featuring a character based on a real girl who escaped Mexico to immigrate to the U.S. after the Mexican Revolution. If your giftee hasn’t read the first book, wrap ‘em both up.

The social media-obsessed teen on your gift list may need to read “The Facebook Narcissist” by Lena Derhally. It’s a book that may make them think twice before posting and sharing. They’ll “LIKE” it.

If you read “Caste: The Origins of Our Discontents” by Isabel Wilkerson, you know that it’s a great book. Share it with your young adult this holiday, because it’s not in a version that’s “adapted for young adults.”

Now for the housekeeping: like everything else in the world, books can change. Titles may vary, covers may vary, you might be able to find some of these books in paperback versions, so be aware when you’re making out your book-lovers gift list. If you have any questions or need other suggestions, please do lean on your favorite librarian or bookseller.

Seriously, they are like your favorite comic book superheroes, only better because they know books.

Season’s Readings!

Look for the reviewed book at a bookstore or a library near you. You may also find the book at online book retailers.

The Bookworm is Terri Schlichenmeyer. Terri has been reading since she was 3 years old and never goes anywhere without a book. She lives in Wisconsin with three dogs and 10,000 books. ❖

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