CORN HIGHLIGHTS:

• Strong money flow into the grain markets, and commodity markets in general, helped push corn futures higher on the session. March corn gained 7 ¼ cents on the day, led by buying in the wheat and soybean markets.
• Wheat futures posted strong gains as tensions escalated in the Black Sea region with an attack on a Russian warship at its port in Crimea by the Ukraine military. Typically, Ukraine war news has been brushed off by the markets in general, but with the end of the year approaching, this event triggered short covering in the wheat markets.
• Managed Money were strong sellers of corn positions in last week’s Commitment of Traders report. Funds added 29,000+ short positions back into the corn market. With the end of the year coming soon, position squaring of some of those short positions could help support corn prices this week.
• The USDA released weekly export inspection on Tuesday morning. Last week, the U.S. inspected 1.082 MMT (42.6 MB) for corn. Total inspections are running 26% ahead of the previous year and in line with current USDA targets.
• South American weather is turning more friendly for first crop Brazil corn and Argentina corn production. Argentina corn is returning from two years of drought-stressed crops. The Buenos Aires Grain Exchange stated that only 1% of this year’s Argentina corn crop is rated in poor condition.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher after volatile trade due to thin holiday markets that saw prices on either side of unchanged. Support came from soybean meal, as well as higher crude oil.
• Overall, Brazilian weather is improving with showers throughout central and northern Brazil and a wet forecast, but in the central soybean growing state of Mato Grosso, the drought hit hard and the Governor of Rondônia, which is directly North of Mato Grosso, decreed on Sunday a state of emergency due to “the worst drought the state has ever seen”. This will very likely impact production.
• On the other hand, Argentina has been dealt a favorable hand in terms of weather, and 69% of the crop is planted with just 3% rated poor to very poor. Last season, the country only produced half of its usual production, and this year will likely be above average.
• Export inspections were strong for soybeans today at 39.3 mb and were on the higher end of analyst expectations. Total inspections for 23/24 are now at 818 mb, which is down 18% from last year, but have been improving.

WHEAT HIGHLIGHTS:

• Wheat was the star of the grain complex today, with solid gains in all three classes and was likely a big reason why corn was higher. March Chicago wheat appears to have broken out of its bull pennant formation to the upside, and the next target would be the 200-day moving average at $6.60.
• Support for wheat today came from a decline in the US dollar, as well as the re-opening of some major shipping lanes. The two rail lines into Mexico at Eagle Pass and El Paso were re-opened, and shipping issues in the Black Sea region may drive more business to the US.
• Wheat export inspections were still on the soft side, but improved from recent numbers at 15.8 mb and were on the higher side of analyst expectations. Total wheat inspections for 23/24 are now at 343 mb, which is down 21% from the previous year.
• Last Friday’s CFTC report saw non-commercials buying back another portion of their short position by 4,497 contracts, which reduced the net short position to 65,032 contracts. With the funds so heavily short, the recent rally could cause more short covering and potentially a squeeze.

DAIRY HIGHLIGHTS:

• The Total Farm Marketing and Stewart-Peterson family of companies will again be closed next Monday, January 1st, for New Year’s Day.
• Milk prices were unchanged to higher following the Christmas holiday, likely buoyed by active purchasing in the spot cheese market.
• 22 loads exchanged hands during Monday’s spot cheese session, with blocks unchanged and barrels gaining 3.25 cents.
• Little in fundamentals will be available this week and next week will be another shortened trading week with the New Years day falling next Monday.

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

Amanda Brill