Enter the Year of the Dragon! Our predictions for 2024

McKeany-Flavell Hot Commodity Podcast

• Dairy
  • Herd will eventually stabilize and start to grow again
  • We will begin 2024 with 50,000 fewer heifers than we did in 2023
  • Milk output will begin to grow again by spring flush
  • Buyers should be defensive and buy into weakness to extend coverage
• Cocoa
  • Fundamentals are only now starting to catch up to the price move we have already seen
  • Lag in arrivals and projected deficit is growing as we near the mid-point of the main-crop
  • More price increases by large branded companies are expected as cocoa continues to trade at 47-year highs
  • High prices will cause demand destruction manifest in retail sales figures

• Economy & energy
  • First rate reduction at June FOMC: 100bp total 2024
  • Core CPI falls to 3% and holds
  • GDP averages closer to 1%, maybe a slight negative quarter mixed in
  • S&P makes new record high, but returns come back down to earth in the 6-8% range
  • Crude oil breaks the $68 soft floor and averages $65 despite an EIA forecast of $78
• Sugar
  • # 11 sugar will trade up to mid-20s before coming back to current levels
  • # 16 market will remain just below High Tier imports
  • 2025 sugar negotiations will mirror 2024 negotiations
• Corn
  • Acreage may lose to soybeans
  • Ethanol demand stalls
  • Exports robust
  • Ending stocks remain over 2.0 billion bushels
• Wheat
  • U.S. crop to reach 2 billion bushels next year, despite fewer planted acres
  • Global stocks recover: 267 to 270 MMT
  • La Niña watch in late 2024
• Edible oils
  • Soybean oil use for biofuel to reach or surpass 13.4 billion lbs
  • Despite this, soybean oil futures may finally meet their “new normal”: listen for that number!
• McKeany-Flavell’s Spring Market Seminar coming April 17, 2024!
  • Mark your calendars, registration opens in January!
• Happy New Year!

Host: Michael Caughlan, President & CEO
Expert: Jeffrey Rasinski, Consultant
Expert: Shawn Bingham, Director of Risk Management
Expert: Kevin Combs, Vice President – Global Sweeteners Specialist
Expert: Craig Ruffolo, Vice President – Commodity Specialist
Expert: Eric Thornton, Commodity Specialist
Expert: Nicole Thomas, Vice President – Information Services