CORN HIGHLIGHTS:

• The corn market lacking very little fresh bullish news, saw weak price action trading 2 ½ cents lower in the December futures on Monday. Selling in the soybean market and a drop in crude oil prices limited upside potential in corn futures.
• Within expectations, weekly export inspections totaled 20.9 mb for the week ending October 26. Total export inspections for the current marketing year are 195 mb, up 17% versus last year. The USDA is targeting total exports for the year at 2.025 billion bushels, up 22% year-over-year.
• Corn harvest is expected to reach 69% complete on Monday’s USDA Crop Progress report. This would be up 10% over last week. Although progress may have slowed week over week due to rainfall in the covered areas of the Corn Belt in the past 7 days, harvest pressure has also limited corn prices.
• South American weather is forecasted to stay dry and hot for areas of Brazil, and areas of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, weather will grow more in importance in the weeks ahead.
• Last week, managed money funds were reported as net short 100,430 corn contracts, reducing their short positions by 8,440 contracts. Global and US corn supplies are still heavy, and funds will still need a reason to exit those remaining short positions, which is lacking at this time.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower due to pressure from lower soybean meal, lower world veg oils, and a selloff in crude oil. Soybean meal made new contract highs on Friday but gave back those gains today as the market became very overbought.
• Soybean export inspections for the week ending Thursday, October 26, totaled 69.5 mb and were within the average trade range. Total inspections for 23/24 are now at 366 mb, which is down 3% from last year. Overall, soybean exports have improved over the past few months.
• While export demand has picked up, domestic demand has been stout as well with crush margins increasing significantly and incentivizing processors. Exports of soybean meal have increased greatly as the world turned to the US in place of Argentina, and the use of soybean oil as biofuel has been gaining more traction as well.
• Weather in South America has not improved much with the central and northern regions of Brazil remaining dry along with Argentina, but planting is pressing on anyway after previous delays. The 10-day forecast is still very dry, but there are better rain chances for Argentina and the main growing area of Mato Grosso, in Brazil. Southern Brazil remains far too wet with reports of flooding.

WHEAT HIGHLIGHTS:

• Wheat had a mixed close with losses in Chicago and Minneapolis, but small gains in KC. Bear spreading was a noted feature in the Chicago contracts – nearby months were under more selling pressure compared to deferred ones. This may be a result of the recent rains in Argentina (with more in the forecast) that are leading some to think their production may improve.
• Also weighing on wheat today were poor export inspections. The USDA said only 7 mb of wheat were inspected, bringing the 23/24 total to 261 mb, and below the pace needed to meet their estimate. That is down 26% from last year, and the USDA is estimating 700 mb of exports.
• Despite Israel sending ground troops into Gaza, the fighting seems to currently be contained to that area and has not spread into the wider region. Along with profit taking, this may explain why crude oil is nearly three dollars per barrel lower as of this writing. Regardless, crude trending lower throughout the session also pressured the grain markets.
• Ukraine shipments through the Black Sea were temporarily paused last week due to tax and customs issues, according to officials. There were also rumors of explosives and / or threats from Moscow. However, vessels are said to be moving through the corridor again with most of the ag goods headed for the EU and Africa.

DAIRY HIGHLIGHTS:

• Class III futures were mixed, but mostly lower today, with the November contract falling 11 cents to $17.29.
• Spot cheese fell another 2.3750 cents today, struggling to find buyers around these levels. Blocks are sitting at a 6.50 cent premium to barrels.
• Class IV barely moved today with some contracts green on light volume. November closed at a $3.36 cwt premium to its Class III counterpart.
• Spot butter reacted to a rough week last week by rallying more than a dime today. Powder was unchanged at $1.1975/lb.

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Author

Amanda Brill