Dry Weather in South America: How Many Soybean Bushels are at Risk??

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🌞 Argentina's Hot and Dry Weather Impacting Crops 🌱
Hot and dry conditions in Argentina are starting to take a toll on the corn and soybean crops 🌾. While both crops experienced ideal growing conditions during spring thanks to abundant rainfall, high temperatures and reduced rainfall at the end of December are now affecting their development ☀️. The Rosario Grains Exchange reported that some areas received only 30% of their average rainfall in December 🌧️. Despite these challenges, the Buenos Aires Grains Exchange stated that the crops are still progressing well due to moisture earlier in 2024. However, Argentina is expected to remain hot and dry over the next two weeks, which could further stress crops 🌞.
🇨🇳 China Adds US Companies to Export Control List 🔒
China has added 28 US companies to its export control list, preventing them from exporting dual-use items (products that can be used for both civilian and military purposes) to China 📉. The exact enforcement details and which products will be classified as dual-use remain unclear 🔍. Additionally, China imposed sanctions on 10 defense firms related to military sales to Taiwan 🇹🇼. These sanctions are expected to have little impact as US military companies do not sell arms or related goods to China 💡. These actions are seen as a response to the anticipated tougher US policies against China under President-elect Donald Trump 🤔.
💵 US Dollar Index Hits Two-Year High 📈
The US dollar index reached its highest level in over two years last week, rising 0.8% against a basket of currencies as the new trading year began 📊. The strength in the dollar is attributed to investor optimism about Donald Trump’s return to the White House, as they expect lower taxes and deregulation to boost economic growth, consumer spending, and business investment 💰. However, analysts caution that the US dollar could face a correction, with only two quarter-point rate cuts expected this year and the potential for negative US economic data 📉.
📉 US Export Sales Disappoint in Latest Report 🌽
US export sales were underwhelming last week, with net corn sales falling below expectations at 777,000 metric tons (31 million bushels) 🌽, a 55% decrease compared to the previous week and 44% below the 4-week average 📊. Mexico was the largest corn buyer for the week 🇲🇽. Net soybean sales also fell short of expectations, declining to a marketing year low of 484,700 metric tons (18 million bushels) 🌱, a 51% drop from the previous week and 67% lower than the 4-week average 📉. China was the largest soybean buyer 🇨🇳. Net wheat sales also missed expectations, coming in at 140,600 metric tons (5 million bushels) 🌾, down 77% from the previous week and 68% from the 4-week average 📉.
⚡ US Renewable Diesel and Biofuel Production Up in October 🔋
US renewable diesel and biofuel production increased in October, with renewable diesel producers using 77% of their capacity, the highest since July 🌱. Biodiesel producers utilized 89% of their capacity, marking the highest level since June 2023 🔋. The increase in production is attributed to improved margins, which were boosted by higher tax credit values and stronger demand 🚗.