CORN HIGHLIGHTS:

• Strong selling in the commodity space weighed on corn futures, which reversed off session highs.  March corn lost 6 ¼ cents on the session. The weak price action damaged an improving technical picture and could trigger additional long liquidation and selling going into tomorrow’s session.
• Strong selling in the crude oil market was the driver behind the liquidation of length across the ag commodity markets on Wednesday. Crude oil futures traded over $3.00 lower and under $70.00 a barrel before seeing some price recovery.
• Farmer selling and hedge pressure likely limited the market’s rally potential. As prices ran into resistance near the 490 – 500 window, they were possibly met by some producer selling.
• Corn demand has improved in recent weeks. The USDA will release weekly export sales on Thursday morning. Expectations are for last week’s new sales to range from 725,000 – 1,500,000 mt.
• Ethanol production for last week averaged 1.076 million barrels/day. This was up 6.4% from last week and over the 5-year average. Ethanol stocks were 21.439 million barrels, up slightly from last week.  Total corn used for ethanol production last week was 21.693 mb. This is currently ahead of the USDA projected pace for the marketing year.

SOYBEAN HIGHLIGHTS:

• Strong selling in the soy products and crude oil pressured soybean futures lower on the session.  January soybeans lost 10 cents on the day and closed under the key 1300 support level.
• Edible oil prices struggle as palm oil prices continue to slide. The weakness in the edible oil market pressured soybean oil futures, closing back under 50.00 cents/pound.
• China stayed active in the US soybean export market, as the USDA announced a sale of 136,000 mt of soybeans for the current marketing year. This sale was likely for February delivery out of the PNW.
• Weekly export sales for soybeans are expected to range from 1.0 – 1.8 mmt for last week. The USDA will release the weekly export sales report on Thursday morning.
• Brazilian weather has improved significantly, with rain having fallen in some of the driest areas of the country with more expected. While production will still likely be variable in some regions, the recent rains may have helped stabilize the crop in other areas.

WHEAT HIGHLIGHTS:

• March Chicago wheat managed to just barely stay afloat with a gain of 2-1/4 cents for the day, with bull spreading noted, likely spurred by recent Chinese purchases, as the deferred contracts lost ground to the nearby ones. However, all three US wheat classes closed lower overall.
• Another large private sale of US SRW wheat to China was announced by the USDA, this time for 372,000 mt for delivery during the 23/24 marketing year. Despite this sale, the market appeared to implement a risk off posture today, with lower closes in corn, soybeans, meal, bean oil, and livestock. Additionally, crude oil is sharply lower, which is down almost $3 per barrel as of this writing.
• On a positive note, March Chicago wheat was able to close just above its 100 day moving average of 632 ¼ for the first time since the end of July. Combined with the recent correction from oversold, this may indicate that there is still enough technical buying in wheat for momentum to continue higher, regardless of an off day today.
• Egypt purchased 180,000 mt of wheat from Russia and Ukraine on an international tender. This is a reminder that Black Sea wheat exports remain competitive, especially from Russia, and it may take more friendly news to push wheat significantly higher.
• European Union soft wheat exports, as of Sunday, totaled 12.5 mmt since the season began on July 1. This compares with 15.3 mmt at the same time last year, representing a decline of 18% year on year. For a similar timeframe, Ukrainian grain exports have totaled about 13.7 mmt versus 19 mmt last year. That 13.7 mmt figure includes about 6.1 mmt of wheat this season, versus 7.2 mmt last year.

DAIRY HIGHLIGHTS:

• Cheese was bid higher again in the spot trade with blocks gaining 3.50 cents, while barrels climbed a penny. This could be tied to some flow over strength from the GDT auction improving 1.6% yesterday.
• Spot whey improved slightly to $0.4025/lb with futures staying steady.
• Class III futures strengthened again today on support from products. The 2024 Class III average now sits at $18.20/cwt.
• Class IV futures also moved higher on the day following the Class III market. The 2024 Class III average closed at $19.69/cwt.
• Spot butter saw no changes on the day staying at $2.67/lb while futures saw improvements in 2024 contract months. Powder futures were mixed but spot powder jumped 1.50 cents to close at $1.18/lb.

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Author

Brandon Doherty