CORN HIGHLIGHTS:

• With a day of aggressive selling in outside markets, corn futures were able to battle off early session lows to finish higher on the day. The stronger technical close could see some additional follow-through short covering going into tomorrow’s session.
• With equity markets seeing strong selling, risk off trade was hitting other assets that were over-valued or high priced. Grain markets are on the opposite side of that picture but may have seen some short covering in order for firms to raise funds to cover margin calls in other markets.
• Weekly export inspections for corn were supportive at 47.8 mb (1.213 mmt). The drop in corn prices has kept the US competitive in the export market, bringing some contra-seasonal strength in exports.  The current marketing year export pace is in line to reach USDA targets as the marketing year closes at the end of the month.
• The USDA will release crop ratings later this afternoon. The market is expecting a 1% drop in corn good to excellent ratings to 67%. Corn ratings typically slide this time of year as the crop grows more mature.
• Weather forecasts are still non-threatening for corn production. Long-range forecasts into mid-August are targeting cooler than normal temperatures and above normal rainfall for most of the Corn Belt.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day significantly higher after a day of mixed trade which initially saw the soy complex lower at the start of the day after a huge sell-off in the equity markets that also affected crude oil prices. Soybean meal ended the day higher while soybean oil remained lower along with crude.
• The Dow Jones Industrial Average (DJIA) is currently set to post a loss of over 1,000 points on the day, triggered by a disappointing jobs report on Friday and the Japanese Nikkei Index losing over 12% in a single day this weekend. The selloff in equities today primarily affected livestock and crude oil prices, and it was slightly surprising to see a higher close in both corn and soybeans. It is possible that hedge fund money was exiting the stock market and entering the oversold grain market to cover short positions and book profits.
• Weather forecasts are mixed with Illinois and Iowa having turned slightly drier over the next 7 days, but temperatures are expected to be cooler which should offset the lack of rain. The northwestern Plains continue to receive too much rain.
• Friday’s CFTC report showed that as of July 30, funds were sellers of 14,932 contracts of soybeans which increased their net short position to 178,591 contracts. Funds continued selling as the weather has left crop conditions in good shape, but they are near record short and may be hesitant to get much more aggressive with new shorts.

WHEAT HIGHLIGHTS:

• After trading in the red for most of the session, wheat futures eked out a positive close in both the Chicago and Kansas City contracts. However, Minneapolis closed lower alongside Matif wheat futures. Rain on the radar for Minnesota and the Dakotas today may account for the relative weakness of spring wheat.
• Most outside markets took a risk off posture today due to concerns about both the US and the world economy. The DJIA at the time of writing is down over 1000 points, along with energies and precious metals which are trading lower, while livestock closed sharply lower. On a bullish note, the US Dollar Index was also down hard, at one point hitting the lowest level since January, and may have offered some support to the grain complex.
• Export inspections for wheat totaled 16.2 mb, bringing 24/25 total wheat inspections to 130 mb, up 16% from last year. However, inspections are slightly behind the USDA’s estimated pace. The USDA estimates exports for 24/25 at 825 mb, which would represent a 17% year over year increase.
• According to IKAR, Russian wheat export values ended last week at $221 per mt FOB. That is a $1 increase from the week prior. Additionally, SovEcon said that last week Russia exported 1.06 mmt of grain, with 930K mt of that being wheat. The total exports were above last week’s total of 1.0 mmt.
• According to Ukraine’s ag ministry, 24/25 grain exports are up over 40% year over year. As of August 5, exports for the 24/25 season totaled 3.7 mmt compared to 2.6 mmt a year ago. Of that total, wheat accounted for 1.5 mmt, corn at 1.6 mmt, and barley at 533K mt.

DAIRY HIGHLIGHTS:

• Class III milk futures saw double-digit losses in all remaining 2024 contracts. September futures continue to take the biggest hit, losing $1.83/cwt over the last 4 trading sessions.
• Spot cheese was down another 1.50 cents to $1.8750/lb. Spot whey went unchanged from Friday at $0.61/lb.
• Class IV milk futures have held steady despite Class III taking a sizeable hit. August, September, and October contracts continue to trade above $21.50/cwt with November not far behind.
• Spot butter continues to hold above the $3.10/lb level while powder at the moment still trades above the key $1.20/lb range.
• This week we have a dairy products report and a GDT auction event. Expect these reports to have some effect on market movement.

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Author

Amanda Brill