CORN HIGHLIGHTS:

• It was a strong day in the corn market to start the week, as concerns over Brazil weather and heavy buying in the soybean market spilled over into the corn market, triggering short covering. The strong close and positive price action could lead to some additional follow-through buying going into tomorrow’s session.
• Weather forecasts stay extremely hot and dry for Brazil grain producing areas for the next 10-days.  Weather models are looking at some potential rains at the end of that time period, but accuracy of longer-range models is questionable. Brazilian corn futures traded sharply higher on the day, trying to encourage producers to plant the important 2nd crop Brazil corn.
• Weekly corn export inspections were within analysts’ expectations during Monday’s USDA Inspections report.  Last week, U.S. exports shipped 609,000 mt of corn (24 mb), year to date, total inspections are at 6.161 mmt, up 23% over last year.
• The USDA Crop Progress report will likely show that corn harvest is in the last legs. Last week, the harvest was 81% complete. That total should be closer to the 90% window with just the northern states lagging in harvest.
• With the bump in prices, rallies may stay limited due to harvest pressure and large supplies available after the completion of a potential near record 2023 corn crop.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day with big gains thanks to a sharp rally in soybean meal, as export demand heats up. Hot and dry conditions in Brazil have been very supportive, while southern Brazil deals with excessive rains. Soybean oil managed to close slightly higher, along with crude oil.
• China has become a much more active buyer of US soybeans since Brazil’s stores began getting emptied with China and unknown destinations purchasing nearly 100 mb of soybeans just last week. A flash sale was also reported today of 204,000 metric tons of soybeans for delivery to China during the 23/24 marketing year.
• Soybean planting in Brazil is now estimated at 57% complete by Safras & Mercado, which is behind last year’s pace of 67%. There are also estimates that 20-25% of Brazilian soybeans will need to be replanted due to the dry conditions.
• Last week’s WASDE report was slightly bearish, but received a much more negative reaction, which may have been offset today. Yields were increased by 0.3 bpa to 49.9 bpa, which increased production by 25 mb and that went right to increasing the ending stocks to 245 mb.

WHEAT HIGHLIGHTS:

• Wheat closed in positive territory, despite trading lower this morning. Today’s gains in wheat were minimal, and it was likely pulled higher by corn and especially the sharply higher soybean market. If  the wheat export inspections were better, there may have been more of a rally. However, inspections of just 7.6 mb were poor; this brings the total 23/24 inspections to 274 mb, still down 26% from last year.
• Russia’s wheat FOB export values are said to have risen by about $5-$7 per metric ton. For now, they are still very competitive and getting much of the world’s export business. However, this change could indicate that wheat prices may begin to rise globally. On the other hand, the USDA report last week did result in a 5 mmt increase to Russia’s crop to 90 mmt, so they will likely remain competitive on exports.
• Although there are problems in Brazil, Argentina’s weather has turned more favorable. According to the Buenos Aires Grain Exchange, Argentina’s wheat production is estimated at 15.4 mmt, with their harvest now 14.4% complete, compared with 9.3% last week.
• China looks like it will remain the world’s top wheat importer for the second year in a row. On last week’s report, the USDA estimated that China will purchase 12 mmt of wheat for the 23/24 season. Elsewhere, Egypt is struggling with economic issues that are curbing their wheat imports, as a result of their currency losing about half its value since the beginning of 2022.
• According to FranceAgriMer, as of November 6th, 67% of the French soft wheat crop has been planted. That is behind both the average and last year’s pace. The slowdown is attributed to wet weather and muddy fields. The heavy rainfall they have seen could reduce the planted acreage and lead to an increase in prices.

DAIRY HIGHLIGHTS:

• Class III contracts were mostly higher today with the second month chart jumping 34 cents to $17.23. Some later 2024 contracts held small losses.
• Spot cheese was 3.375 cents higher today with both blocks and barrels closing positive, finishing the day at $1.65875/lb. Whey also gained 0.75 cents to get back over $0.40/lb.
• Buyers also won the day for the nearby Class IV futures with December up 4 cents and January up 20. The November contract is still holding comfortable above $20.00 as the month reaches its halfway point this week.
• Both spot butter and powder were higher, 4.50 and 2.00 cents respectively, to help the Class IV action. Spot butter is at least due for some retracement after the recent shelling it has faced.

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Author

John Heinberg