12/11/2024 How Much More Up?

On the Grains
Well, what a nice surprise the USDA gave us yesterday, a cut in carryout that surpassed even the most bullish projections. While the reduction in carryout was warranted, we have been reporting on exports being on fire for some time. I expected them to slow play it, so it was a surprise to see that big of a cut. I would suspect that this is the last large cut in carryout for the year and here is why, last year the USDA had carryout at 1.76 yet had the average farm price at $4.55, this year we have carryout at 1.73 and an average farm price of $4.10. While yes, this fall we spent some time lower than last fall which would affect the average, they don’t foresee a jump in farm prices. Without the 45Z, which we are told will be released on Biden’s watch, the market will need to be fed and that doesn’t look great. Not to mention just because the 45z is released doesn’t mean it will be workable for the average farm and will take time to implement.