China Continues US Corn Buying Spree
- May 2023 CBOT corn futures added 8-3/4 cents this week to close at 643
- December 2023 CBOT corn futures shed a penny this week to close at 560-1/2
- Corn export sales set a marketing year high last week, coming in at 122 million bushels. China accounted for 73% of that total. Corn export sales have reached about 74% of the USDA’s full-year forecast as of this week, but this is still below the average of 80% for this week of the marketing year
- Eight of the last nine trading days have seen corn export sales to China for the 2022/23 marketing year. The total bushel amount sold to China over these eight days comes in near 110 million bushels
- Most private estimates are looking for 2023 planted corn acres to come in 2 to 3.5 million acres higher than last year in the upcoming USDA planting intentions report. In their outlook forum a month ago the USDA estimated planted acres for this year to come in at 91 million acres up 2.3 million from 2022
Soybeans Pressured by Fund Liquidation
- May 2023 CBOT soybean futures shed 48-1/4 cents this week to close at 1428-1/4
- November 2023 CBOT soybean futures shed 40-1/4 cents this week to close at 1273-1/4
- Much of this week’s price action in the soy complex is being attributed to heavy selling by the Managed Money funds. As of March 14, the funds held a 127,661-contract net long position
- November soybeans had traded lower in 13 consecutive sessions through Thursday’s close. Beans broke the losing streak on Friday, however, finally trading higher. This was the lowest close for November of 2023 soybeans since the week of July 18.
- Next week Friday at 11 AM the USDA will release their Planting Intentions report. Soybean planted acres for 2023 are expected to be mostly unchanged from last year’s 87.5 million planted acres
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KC Wheat Continues Trend Higher
- May 2023 CBOT wheat futures shed 22 cents this week to close at 688-1/2
- May 2023 KCBOT wheat futures added 12-1/4 cents this week to close at 848
- May 2023 MGEX wheat futures shed 3-1/4 cents this week to close at 857-1/2
- Russia could recommend a temporary halt in wheat and sunflower exports after a sharp drop in global prices in recent weeks, according to a Moscow-based business newspaper, citing two unidentified sources who attended a government meeting recently. Russia accounts for about a 1/4 of all global wheat exports
- Chicago wheat futures on the back of this rumor posted their largest move higher since February 10 today
- KC wheat futures premium to Chicago wheat futures reached a 12-year high this week as the premium neared $1.60 per bushel. The all-time record premium between the two was set in 2011
Cheese Aggression Gives Nearby Class III Milk a Jolt
Nearby Class III milk futures have exploded higher over the last couple of weeks following a sudden demand shift in the spot cheese trade. Over the past two weeks, the US block/barrel average cheese price has added an impressive 25.625c and closed the week back over the $2.00/lb threshold. Cheese buyers have been aggressive. With that kind of a rally, it’s no surprise nearby milk futures are following the move higher in cheese. April 2023 Class III milk jumped 76c this week and is now up $2.56 per cwt from its February 27th low. What’s most interesting, though, is that the second half of the year contracts remain stuck in the mud. There may be some pessimism that this cheese rally won’t last and the market isn’t quite ready to add premium to the future months. For now, the market structure for dairy is pretty flat. April 2023 settled the week at $19.93 while October 2023 traded at $19.63. The cheese bidding has also taken Class III quite a bit higher than Class IV. A weaker butter and powder trade has kept the Class IV market under pressure. April Class IV was down 13c this week.
Author
Keegan Madigan