Check our advice monitor on ProFarmer.com for updates to our marketing plan.
Wheat producers: Increase 2024- and 2025-crop sales... December SRW wheat futures have moved into our target range for additional sales. We advise all wheat producers to sell another 10% of 2024-crop in the cash market and an additional 10% of expected 2025-crop for harvest delivery next year. This pushes sales to 70% for 2024-crop and 20% for next year’s production. Our next upside price target range would be $6.50 to $6.75 in December SRW futures.
Plains face a very dry month... The moisture profile across the Plains is quite poor and there is no potential for significant rain over the next two weeks, according to World Weather Inc., noting rainfall during the second half of the month will also likely be below normal unless tropical moisture flows into the region. The forecaster says much of the recent dryness in central North America was directly related to the active tropical weather in the Delta and Southeast, which allowed high pressure to build up to the west and north of the storms. World Weather believes drought may expand a little more significantly than NOAA forecast in its Monthly Drought Outlook.
SovEcon cuts Russian wheat export forecast... Black Sea consulting firm SovEcon cut its 2024-25 Russian wheat export forecast by 500,000 MT to 47.6 MMT due to bad weather trimming production. That would be down 4.8 MMT from last year. Despite the production cuts, Russian wheat exports were rapid through the first quarter of 2024-25, which would suggest a significant slowdown later in the marketing year.
Another Russian region declares drought emergency... Oryol, Russia’s tenth-largest grain-producing region, has declared a state of emergency due to drought and the resulting winter crop damage. Several other major Russian grain-producing regions have already declared emergencies due to adverse weather, ranging from drought to heavy rains.
Egypt agrees to large direct wheat deal... Egypt’s state grains buyer has agreed one of its largest ever direct wheat deals for monthly shipments from November to April, two sources with direct knowledge of the matter told Reuters. The wheat will be shipped to the General Authority for Supply Commodities (GASC) with around 510,000 MT to be supplied every month sourced from Black Sea origins, totaling up to 3.12 MMT over the six-month period. The deal is set to be supplied by a joint venture between an Egyptian entity and a major global supplier on a monthly basis, a source said without disclosing the names of the companies due to the sensitivity of the matter.
EU delays landmark anti-deforestation law amid global pressure... The European Commission proposed a 12-month delay for its key legislation aimed at curbing global deforestation, responding to intense pressure from commodity-producing countries and industry. “Since all the implementation tools are technically ready, the extra 12 months can serve as a phasing-in period to ensure proper and effective implementation,” the commission said in unveiling its delay.
Initially set to take effect on Dec. 30, the law requires importers to ensure products like coffee, cocoa, soy and beef are not sourced from recently deforested areas. While designed to reduce the EU’s deforestation footprint, the regulation has faced strong opposition from countries like Brazil and Indonesia, who argue it unfairly targets smallholder farmers. Industry groups within the EU have also raised concerns about supply chain disruptions and rising costs. Approval for the delay is needed from both the European Parliament and the bloc’s 27 member states.
The commission also offered additional guidance documents and a stronger international cooperation framework as part of the package.
Trump’s proposed tariffs could generate over $500 billion annually, Wells Fargo estimates... If Donald Trump wins the election and imposes a 10% tariff on all imports and a 60% duty on Chinese goods, Wells Fargo economists estimate that the U.S. government could have collected over $500 billion in tariffs last year. Although these tariffs would likely reduce imports, particularly from China, the economists suggest the U.S. could still generate hundreds of billions of dollars annually from the proposed rates. However, the estimate represents an upper-bound scenario, with actual revenue depending on the impact on import volumes.
OPEC+ sticks to output policy, doubles down on compliance... OPEC+ ministers kept its oil output policy unchanged, including a plan to start raising output from December, while also emphasizing the need for some members to make further cuts to compensate for overproduction. OPEC+ is cutting output by a total of 5.86 million barrels per day (bpd), or about 5.7% of global demand, in a series of steps since late 2022. The group plans a 180,000-bpd increase in December as part of a gradual unwinding of its most recent layer of voluntary cuts extending into 2025. The hike was delayed from October after prices slid.
Countries’ compliance was in focus at the meeting, sources who attended told Reuters, and is expected to remain so in coming weeks, particularly that of Iraq and Kazakhstan. Those nations have promised what are known as compensation cuts of 123,000 bpd in September and more in later months to make up for their previous over-production.
Saudi Arabia warns of potential $50 oil amid OPEC+ cheating, threatens price war... The Wall Street Journal reports that Saudi Arabia’s oil minister has warned that oil prices could drop to as low as $50 per barrel if OPEC+ members fail to comply with agreed production limits, citing OPEC delegates. This warning is seen as a veiled threat of a potential price war if countries continue overproducing, with Iraq and Kazakhstan singled out for flouting quotas. Despite geopolitical tensions such as Iran’s missile attack on Israel, oil prices have stayed below $75 per barrel, largely due to weak economic growth. Saudi Arabia, which needs oil prices around $85 per barrel to fund its economic reforms, has previously opened production spigots to protect its market share. Rising global production in Brazil, Guyana and the U.S. could further heat up competition next year.