CORN HIGHLIGHTS:

• The buyers stepped back into the corn market as prices posted a key reversal off session lows, and the market likely saw some short covering and technical buying on the session as the market eased its oversold condition. March corn posted a new contract low early in the session, but prices rallied to finish 4 ¼ cents higher on the day.
• The posted reversal on daily charts may likely bring some additional buying support going into Wednesday’s session. The key will be follow-through buying and pushing prices through Tuesday’s high on the March futures at 462 ½.
• The key news event this week will be Friday’s USDA WASDE and Grain Stocks reports. Expectations are for corn carryout projections to be reduced slightly as the USDA adjusts harvested acres and yield. Demand and first quarter usage will be closely watched, as improved feed demand at the end of the year could tighten overall supplies.
• Brazil Agriculture Agency, CONAB, will release their projections for both soybean and corn crops on Wednesday morning. The market will be closely watching if CONAB will make strong cuts to the soybean crop and the second (safrinha) crop corn due to early season weather issues.
• 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.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher after mixed trade throughout the day that saw prices on either side of unchanged. Soybean meal closed slightly lower while soybean oil moved higher with help from higher palm oil and crude oil.
• Improved South American weather over the past few weeks has pressured soy products heavily, but with the WASDE report coming up on Friday, non-commercials are likely covering their newly made net short position by buying some contracts back. The report is expected to show a decrease in Brazilian soybean production, but a possible increase in Argentinian production.
• Estimates for Friday’s WASDE report have Brazilian soybean production within a range of 152.7 mmt and 160.0 mmt, which would be down from the last guess of 161.0 mmt. Some private analysts expect a number closer to 150 mmt. Estimates for Argentinian soybean production are in a range between 48.0 mmt and 50 mmt with December’s estimate at 48 mmt. Argentina’s crop may get larger due to good weather.
• 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. And while total inspections are now at 880 mb for 23/24, which is down 21% from the previous year, actual cumulative census soybean exports through last November were above the pace of inspections, though still down 10% from last year.

WHEAT HIGHLIGHTS:

• Wheat saw a nice rebound today but couldn’t quite regain all of yesterday’s losses. In any case, all three classes closed higher alongside Matif wheat futures. These gains were despite a higher US Dollar today. The rally may have been partly technical in nature with all three US wheats at or near oversold territory on daily stochastics.
• Offering support today were rumors that Mexico may be interested in purchasing US wheat. This is in addition to talk that China may also be looking to buy. So far there have been no flash sales announced this week but that does not rule out the possibility of either country stepping up this over the next few days.
• In addition to Friday’s supply and demand report, traders will also receive the winter wheat seedings report. Analyst estimates call for a reduction in acreage by 1.0 to 1.5 million. The average projection is 35.8 ma versus the previous USDA estimate of 36.7 ma.
• Flooding in the Australian state of Victoria has caused crop damage and has stranded livestock. This is also delaying harvest of the barley and wheat crops. Typically, El Nino means a hot and dry forecast for Australia, so this is a bit out of the ordinary. Currently some climate scientists are predicting that 2024 will be the hottest year on record globally, beating out 2023.
• The storm system moving over the Midwest is sure to bring moisture that will improve SRW crop conditions. But next week, the forecast calls for arctic cold conditions to move down from Canada and bring sub-zero temperatures. For areas without snow cover, this could mean crop damage.

DAIRY HIGHLIGHTS:

• The February Class III contract closed 24 cents higher today at $15.98 on top of yesterday’s 21-cent gain. The second month Class III contract has not closed above $16.00 since December 14th.
• Spot cheese was up for a second day as well, jumping 3.3750 cents to move to a penny under $1.50/lb. Spot whey was unchanged.
• Class IV futures were even to higher with the second month contract unchanged at $19.08. It remains at more than a $3.00 premium to its Class III cousin.
• Spot butter, after testing the bottom end of the range, was up 3.75 cents today to close at $2.5675/lb. Spot powder was higher too, closing at $1.2050/lb.

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Author

Brandon Doherty