U.S. Agricultural Futures Finish Higher for 2019
Rough rice led U.S. agricultural futures finishing +27.59% for 2019 while soybean oil is +27.42%.
Corn futures were +3.6% at the end of 2019 while ethanol was +9.34%.
Soybeans rallied into the close of 2019 and will finish +6.42% while soybean meal is -2.4%. Soybean oil closed.
Wheat is +10.34%.
Lean Hog futures will end +17.88% for 2019.
Live cattle are +1.96% for 2019 while feeder cattle are down -1.6%
Canola is -1% for 2019.
FBN’s Take On What It Means: At FBN, we believe that 2019 presented a handful of challenges for U.S. grains and oil seeds. From large global supplies to the U.S./Chinese trade war and a strong U.S. dollar, we believe that 2019 demanded a nimble and forward-thinking approach to crop marketing. We believe that 2020 will present a different set of challenges for the US farmer. Please contact your FBN farm market advisor (FMA) to help make your 2020 a strong year for crop marketing.
Record Brazilian Ethanol Production Unable to Meet Demand
Brazil is producing record levels of ethanol, 35 billion liters, in 2019 and may not be able to meet domestic demand.
Ethanol production stops in mid-December and returns in April when mills start sugarcane processing for the new season.
During the intercrop period, the market is supplied by stocks and imports.
Brazil has 2 sugar cane harvests. One in the fall and the other in the spring.
Brazil is the largest consumer of ethanol.
Currently, conventional gasoline is selling at a premium to ethanol.
In September, Brazil agreed to tariff free imports up 750 million liters (198 million gallons) of US ethanol. Volume past this is subject to a 20% tariff.
FBN’s Take On What It Means For The Farmer: At FBN, we believe that tight supplies and strong demand for Brazil is a positive for the U.S. farmer. In September 2019, President Trump negotiated to increase the volume of U.S. ethanol exports to enter Brazil without an import tariff. We believe that increased export opportunities for US ethanol can help keep production which can be supportive local corn basis.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
