Estimates for 2016 crops
Yield and acreage reductions in most major commodities led to the U.S. Department of Agriculture reducing 2016 production estimates for most major crops.

Corn harvested acres were reduced 100,000 acres and yields were reduced 0.7 bushels per acre, which resulted in a 78-million-bushel reduction in corn supplies. This decrease was partially offset by reduced domestic consumption and led to a 47-million-bushel reduction in ending stocks.

Rice harvested acres were reduced 30,000 acres and yields were reduced 256 pounds per acre, which resulted in a 10.7-million-cwt reduction in rice supplies. Most of the reduction came from the long-grain market, where production was reduced 9.6 million cwt. The strong reduction in long-grain rice supplies was partially offset by a 2 million cwt reduction in use, which led to ending stocks only being reduced 7.6 million cwt to 29.7 million cwt. Long-grain rice stocks remain at their highest level since 2010-11.

Soybeans harvested acres were reduced 300,000 acres and yields were reduced 1.4 bushels per acre, which resulted in a 55-million-bushel reduction in soybean supplies. While there was no change to the demand side of soybeans this month, an additional 5-million-bushel reduction in imports led to further reductions in soybean supplies and stocks declining 60 million bushels to 420 million bushels.

Cotton was the lone commodity that saw production increase. While cotton harvested acres were reduced 14,000 acres, yields increased 34 pounds per acre, resulting in a 44 million bale increase in supplies. While supplies strengthened, an increase in the export forecast helped offset the gains and resulted in stocks being up only 200,000 bales from last month at 5 million bales.

Trucker strike in Brazil
On Jan. 13, truckers in Brazil launched a strike that partially blocked BR-364, a major grain transport route near Rondonopolis in Mato Grosso, and the strike continued through Jan. 16. This road is a common transport route for those moving grain and oilseeds to southern ports like Santos and Parangua.

The truckers are demanding higher pay. Such protests are not unusual in South America, and they are usually resolved quickly.

Trump says dollar value too high
The U.S. dollar is lower against most major currencies after President-elect Donald Trump told the Wall Street Journal its value is too high in part because China holds down its currency. China’s yuan weakened almost 7 percent against the dollar in 2016, nearly double the drop in the year earlier. China’s central bank recently has stepped up efforts to prop up the yuan as Beijing pledges to keep the currency largely stable.

China exports down again
China’s exports dropped 7.7 percent for the 2016 calendar year (in dollar terms), the second year in a row they have fallen and the worst drop since 2009. Meanwhile, its imports declined 5.5 percent from year-ago levels. This resulted in a foreign trade surplus of 3.35 trillion yuan ($486 billion), down 9.1 percent from a year ago, according to the nation’s General Administration of Customs.

Chinese soybean imports up
China’s imports of soybeans climbed 14.8 percent from November to 9 MMT, which is the highest monthly figure since the nation brought in 9.12 MMT of soybeans in December 2015, according to preliminary customs data. In 2016, China imported 83.91 MMT of soybeans, a gain of 2.7 percent from the year prior. This was the smallest annual increase in a number of years due to increases in China’s own soybean crop as well as sales from the nation’s state soybean reserves.

Changes on Cuban relations?
Rex Tillerson, President-elect Donald Trump’s pick for secretary of state, said he would advise Trump to veto any measures to lift the trade embargo on Cuba and would not want to change restrictions on travel to the island nation until the Trump administration completes a review of executive orders with regard to Cuba. This signals that some things could change, despite dozens of farmer groups signing a letter urging Trump to stay the course on progress the Obama administration made with Cuba.

Ethanol benefits
The U.S. Department of Agriculture released a report last week that said ethanol reduces greenhouse gas emissions by 43 percent relative to gasoline, which is significantly more than the 21 percent benefit estimated by the Environmental Protection Agency in 2010. The evaluation is the first of its kind from the USDA and marks a blow to those who have questioned whether ethanol is indeed better for the environment than petroleum-based fuels.

CEOs talk merger plan with Trump
Bayer Chief Executive Werner Baumann and Monsanto CEO and Chairman Hugh Grant met with President-elect Donald Trump last week and outlined Bayer’s planned $57-billion purchase of Monsanto, representatives for the companies said, according to reports by several news outlets. Several members of Trump’s agricultural advisory committee formed during the campaign have been critical of merger deals and want Trump to block them.

Global food prices down
The Food and Agriculture Organization (FAO) of the United Nations reports the Food Price Index averaged 61.6 points in 2016, down 1.5 percent from the year prior. This represents the fifth annual decline in a row. “While prices of sugar and vegetable oils rose significantly in 2016, falling prices in cereal, meat and dairy markets kept the index below its 2015 average,” FAO explained.