CORN HIGHLIGHTS:

• It was a disappointing day in the corn and grain markets in general as selling pressure continued to push March corn futures to new contract lows. March futures lost 5 ¾ cents on the session and is trading below the key 460 price level.
• Managed and speculative funds have been building their short position in the corn market. As bullish news is lacking, funds in last week’s Commitment of Traders’ report pushed their net short position to over 200,000 short contracts, challenging the largest short position for the marketing year.
• Weekly export inspections for corn were within expectations at 857,000 mt (33.7 mb). Total inspections for the marketing year have reached 504 mb, up 28% from the previous year and are running slightly ahead of the needed pace for the USDA target.
• South American weather is still the biggest factor pressuring the markets. For corn, Argentina weather is favorable, and production looks to return to normal levels after two years of drought. Brazil is seeing a wetter long-term forecast, which is pressuring the soybean market; that is putting pressure on corn futures.
• Friday, the market looks toward the key USDA Quarterly Grain Stocks and WASDE reports to be released on Friday, January 12. Quarterly Grain Stocks will look at the usage of corn for the first quarter of the marketing year. As demand has improved in exports, ethanol production, and feed usage, the number could be larger than market expectations.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower but rebounded off the lows earlier in the morning by about 9 cents. While both soybean meal and oil began the day lower, both recovered slightly with soybean oil ultimately posting a gain despite the selloff in crude oil.
• Soybeans are extremely oversold at this point, and non-commercials hold a net short position of 11,629 contracts, which could trigger some short covering ahead of Friday’s WASDE report. It is expected that the USDA will decrease Brazilian soybean production, but the question will be by how much.
• Weekly export inspections for soybeans were a little bit soft for last week with a total of 24.8 mb for the week ending Thursday, January 4. Total inspections are now at 880 mb for 23/24, which is down 21% from the previous year.
• Private analysts are expecting Brazilian soybean production to come in closer to 150 mmt which is far lower than the USDA’s previous guess of 161 mmt, but the recent timely rains could be improving yields. Argentina’s crop has benefitted from good weather, and it should produce enough soybeans to make up for Brazil’s losses.

WHEAT HIGHLIGHTS:

• Wheat closed lower in all three classes, with Chicago leading the way down. Bear spreading was noted in Chicago, with heavier selling pressure on the front months compared to the deferred. This may be related to the winter storm that is forecasted to bring good moisture to winter wheat areas over the next couple of days that may offer improved conditions.
• Weekly wheat export inspections of 18 mb bring the total 23/24 inspections to 372 mb. That is below the USDA’s estimated pace, and the total is also down 16% from last year. Export sales last week were poor but are still running slightly above the USDA’s estimated pace, in part due to China’s purchases a few weeks ago. There continues to be talk that they are looking to purchase more US wheat, but so far those are just rumors.
• Crude oil prices do not usually have a direct impact on the wheat market. However, they can affect the grain complex as a whole. And with crude at one point today down over 3.50 per barrel, it offered weakness to grain futures during today’s trade.
• From the beginning of the season July 1 until January 8, Ukrainian grain exports at 19.4 mmt have fallen 18% year on year according to their agriculture ministry. Of that total, 7.8 mmt are wheat, which is down 9% year on year. The ministry added that Ukraine’s own Black Sea corridor has shipped about 15 mmt of goods since it opened, with about 10 mmt of that being ag products.

DAIRY HIGHLIGHTS:

• Spot Butter has lost a total of 13.50 cents since coming back from the New Year’s holiday. Looking at a weekly chart there appears to be a double top formation forming which would be a technical signal for further bearish activity.
• Class IV took its fair share of losses on the day with the April contract losing 5 cents. Weaker butter trade over the past week has caused Class IV to shift slightly lower.
• Spot cheese is slightly lower than where it was on January 2nd after facing some resistance near $1.46/lb. The whey market has started to curl up after breaking through the $0.40/lb level.
• Class III had an impressive day today with the February contract seeing a gain of 21 cents. The 2024 Class III average now sits at $17.74/cwt which is about 3 cents better than where it was this time last week.

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Author

Amanda Brill