CORN HIGHLIGHTS:

• As the trading volume began to thin going into the holiday trade, the sellers were active in the corn and wheat markets. March corn lost 6 cents and closed at its lowest point since November 30. The weak price action and close will leave the corn market vulnerable to additional selling pressure going into Tuesday.
• Weekly export sales for corn 947,000 mt (37.3 mb) for the week ending December 14. Total inspections for 23/24 are now at 399 mb, up 27% from the previous year. The USDA is estimating corn exports at 2.100 bb in 23/24, up 26% from the previous year.
• China imported 3.59 mmt (141 mb) of corn in November, a record volume for any month. That comes despite China’s report of a record corn crop this past growing season. Total January-November imports were up 12% from last year, largely due to increased arrivals from Brazil. The strong import total brings concerns that China may not need US corn.
• Ethanol margins should see some price support with a potential turn in energy prices. Both crude oil and gasoline prices saw support on concerns of trade disruptions in the Red Sea and the Suez Canal. Crude oil traded 2-3% higher during the session.
• South American weather should remain good for Argentina and Brazil’s first crop corn in the coming week, but it’s still a concern in the longer view for the corn market. The impact of the potential of the Argentina crop returning to normal production will bring competition for US corn in the export market this spring.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day firmly higher as trade waits to see if the wetter Brazilian forecast materializes or remains hot and dry. Both soybean meal and oil ended the day higher as well with some support from a jump in crude oil prices.
• Additional support came from an announcement out of Argentina stating that the government will look to increase export taxes on both soybean meal and oil from 31% to 33% as they attempt to raise funds and fight the extreme inflation that is plaguing the country. The increase in taxes hits especially hard considering the large amount of soybean meal that they are expected to export in the coming marketing year.
• Crude oil prices jumped this morning after BP announced that they were pausing all Red Sea shipments of oil following attacks on vessels by Iran-backed Houthi rebels. Many freight firms have suspended transportation in the wake of the attacks, and this increase in crude prices has been supportive to soybean oil.
• Weekly US export inspections for soybeans were good totaling 51.9 mb for the week ending December 14. This was toward the upper range of analysts’ expectations but was still down 17% from the previous year. Total inspections for 23/24 are now at 778 mb.

WHEAT HIGHLIGHTS:

• All three US wheat classes posted losses, with Kansas City leading the way lower. Rains in the US Southern Plains, along with a firmer US Dollar may have been keeping a lid on the wheat market today. Additionally, the lack of follow through Chinese purchases is viewed as negative.
• Disappointing weekly wheat inspections at 10.5 mb bring the 23/24 total inspections to 328 mb. That is down 22% from last year and is running behind the pace needed to meet the USDA’s goal.
• Saudi Arabia bought 1.35 mmt of wheat over the weekend. Russia is believed to be the one to fulfill this purchase. As long as Russia continues to remain the dominant player on the export front, it will be difficult for wheat prices to rally.
• Managed funds have recently reduced their net short position in wheat, but still hold about 70,000 short contracts of Chicago wheat. This does keep the market primed for more of a rally if there is a catalyst in the form of friendly news.
• According to India’s food secretary, the nation has no current plan to import wheat from Russia. Additionally, they will hold off on adjusting any wheat import duties.

DAIRY HIGHLIGHTS:

• Overall, the dairy trade has been mixed in recent weeks with Class IV still trading at a premium to Class III. These prices have been trending in opposite directions.
• Monday’s dairy spot trade saw cheese as the only down market with 19 total loads traded. Blocks lost 6.75 cents while barrels lost 4.50 cents bringing cheese below the $1.45/lb level at $1.42875/lb.
• This week could see some volatility with the Milk Production report, Cold Storage report, and the Global Dairy Trade auction. The trade will be looking for another up auction to see if we can get a spark in milk and cheese prices.
• Fundamentals lean mixed although there have been some supportive reports out there. The milk market just doesn’t want to latch onto any bullish sentiment at this time.
• This afternoon’s November Milk Production report totaled 18.10 billion pounds, down 0.60% from the same month last year.

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Author

John Heinberg