CORN HIGHLIGHTS:

• Strong selling pressure across the grain markets helped push corn futures lower to start the 2024 calendar year. March corn closed 7 ½ cents lower on the session, establishing a new contract low close.
• An improved weather forecast and rainfall in areas of Brazil triggered the selling in the grain markets. Soybean futures finished with strong double-digit losses. Wheat futures posted double-digit losses as well, pressured by cheaper global wheat prices and a stronger US Dollar.
• Weekly corn export inspections were impacted by the Christmas holiday. Last week, U.S. exporters shipped 569.7 MT (22.4 mb). Total inspections are now at 470 mb, up 24%.
• Ethanol margins are seeing pressure as gasoline demand during the holiday window was weaker than anticipated. Softer crude oil and gasoline prices helped pressure the corn market.
• Corn cash basis is holding firm and may see some improvement as low prices are halting producer selling. The cash market may have to make adjustments to trigger bushels out of producer’s hands

SOYBEAN HIGHLIGHTS:

• Soybeans had a rough start to the new year as they gapped lower on the open and continued to work lower throughout the day. Soybean meal closed lower, but soybean oil managed a higher close despite a loss in crude oil. Improved Brazilian weather has been a bearish factor.
• Today’s export inspections report showed inspections for soybeans at 35 mb, which was in line with expectations but a bit soft compared to previous weeks. Total inspections for 23/24 are now at 855 mb, which is down 18% from the previous year, and the USDA is estimating soybean exports for 23/24 at 1.755 bb.
• The latest forecast for Brazil features significant rains in the northern region of the country where the majority of the crop is grown and is also the area in greatest need of rains. There have been reports of farmers in the central region harvesting the poor soybeans early so that their second crop corn can be planted in time.
• Estimates for South American crop sizes are beginning to fall by private analysts due to the dry and hot weather. StoneX is now pegging the Brazilian soybean crop at 152.8 mmt which is down from 161.9 mmt last month. Some of these losses may be made up by the good conditions in Argentina. The USDA will update their estimates in the WASDE report next Friday.

WHEAT HIGHLIGHTS:

• All three US wheat futures classes posted losses with the heaviest being double-digits lower in the Chicago contracts. Weakness stemmed from corn and soybeans, but also from the US Dollar Index, which continued to rise throughout the session. At the time of this writing, it is up 0.85 at 102.18. To add to pressure, Matif wheat futures lost 1.50 to 1.75 Euros per mt, keeping it in a sideways to lower pattern.
• US wheat inspections at 10.1 mb bring the total 23/24 inspections to 354 mb. That is down 19% from last year, and inspections are behind the pace needed to meet the USDA’s goal. This may have also factored into today’s weakness.
• According to Ukraine officials, their nation has exported 13 mmt of cargo via their own Black Sea corridor since the export deal with Russia ended in July. In the face of danger and attacks on infrastructure, 430 vessels are reported to have been accepted for loading in ports since that time.
• In the Red Sea the US Navy sank three Houthi ships due to their attacks on the US. Iran subsequently sent a war ship into that region. A further increase in tensions could affect wheat (and the grain markets as a whole), but so far it seems to be largely old news to traders that has already been priced in.
• As a reminder, on Friday, January 12, the winter wheat seedings report will be released alongside the USDA’s Supply and Demand report. The former will offer the first estimate of 2024 US wheat acreage.

DAIRY HIGHLIGHTS:

• Milk futures started the shortened, first week of the year going opposite directions. Class III prices fell two to 11 cents while Class IV was mostly higher.
• For the Class III spot trade, spot cheese was 2.50 cents higher to $1.46/lb while spot whey was unchanged at $0.3850/lb.
• On the Class IV side, butter was up two cents to $2.6850/lb while powder gained a quarter cent, closing at $1.1725/lb.
• Today’s Global Dairy Trade Auction saw the overall index up 1.20% from late December. GDT cheese fell while butter was higher.

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Author

Amanda Brill