Canada Threatens Tariffs + 45Z News and Soybean Selloff

Grain Markets and Other Stuff

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1:00 Canada Tariff Threat
3:45 45Z / CSA
5:42 NOPA Crush
8:13 Argentina Rainfall
9:58 Ethanol Production
10:59 Consumer Inflation
Canada's Potential Tariffs on US Products
Canada is preparing to impose tariffs on $105 billion worth of US products if President-elect Donald Trump moves forward with his planned tariffs on Canadian goods. The list of products targeted by Canadian tariffs hasn’t been disclosed yet, but they could affect almost a third of US exports to Canada.
USDA Issues New Rule for Climate-Smart Biofuels
The USDA has announced an interim rule regarding climate-smart practices for biofuel feedstocks. This includes corn, soy, and sorghum and provides farmers with more flexibility to adopt practices like no-till, cover crops, and nutrient management to reduce greenhouse gas emissions. This rule will tie into the 45Z tax credit guidance, potentially unlocking new market opportunities for farmers producing biofuel feedstocks.
US Soybean Crush Hits Record High
The National Oilseed Processors Association (NOPA) released its December crush data, showing that US soybean crush hit an all-time high of 206.6 million bushels. This is a 6.9% increase from November and a 5.8% increase compared to last year. Soybean oil stocks climbed to 1.2 billion pounds, although they were slightly below trade estimates. This marks a strong 2024 for soybean production and oil availability.
Argentina's Crop Outlook Revised
The Rosario Grains Exchange has lowered its corn and soybean crop estimates for Argentina. Argentina's corn crop is now projected at 48mmt, down from previous estimates of 50-51mmt due to dry conditions. Similarly, soybean output is expected to fall, as droughts have reduced yields. The revised forecasts suggest that rainfall in both Argentina and southern Brazil could provide some relief in the coming weeks.
US Ethanol Production Remains Strong
US ethanol production fell slightly by 1% last week to 1.1 million barrels per day but remains up 3.1% compared to last year. Ethanol stocks rose to 25 million barrels, marking a 3.6% week-over-week increase. Implied gasoline demand showed a slight dip, down 1.8% from the previous week, but remained steady year-over-year. Keep an eye on ethanol production as it continues to play a key role in biofuel output and agriculture!
Inflation Indicator Declines for First Time Since July
Core CPI (excluding food and gas) rose by 0.2% in December, showing the first decline since July. The annual increase is now 3.2%, down slightly from 3.3% in November. Headline CPI rose to 2.9%, staying in line with expectations. Experts are concerned that Trump’s economic policies could cause inflation to resurge.