The CME and Total Farm Marketing offices will be closed Monday, January 15, 2024,

in observance of Martin Luther King Jr. Day.

CORN HIGHLIGHTS:

• Corn prices stay choppy going into Friday’s USDA report. March corn slipped 1 ¾ cents on the session and had a narrow 5 ¾ cent trading range as prices hover around the 460 level.
• This morning the USDA released weekly export sales for last week. US exporters reported new sales of 487,600 mt (19.2 mb) for the current marketing year. This total was at the low end of expectations by analysts and disappointing in a difficult demand market. Total corn sales commitments now total 1.192 billion bushels and are up 38% from a year ago.
• The USDA announced a flash sale of 175,000 mt (6.9 mb) of corn to Mexico for the current marketing year. This was the first announcement of an export sale of grain since December 19. The corn market is looking for additional export business, as the window for US corn exports should be more open before the South American harvest begins.
• The Rosario Grain Exchange raised its forecast for the 23/24 Argentina corn crop by 3 mmt. The exchange expects Argentina to produce 59 mmt of corn this season, which would be record production for the South American country.
• On Friday, the USDA will release the January WASDE, Crop Production 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. Beside US totals, the markets will keep a close eye on any adjustments to Brazil and Argentina crop production.

SOYBEAN HIGHLIGHTS:

• Soybeans began the trading session significantly higher overnight with the March contract as much as 10 cents higher, but both soybean and meal prices faded into the close with soybeans unchanged and meal lower. Soybean oil had support from higher palm and crude oil.
• Overnight, weather models were adjusted to show dryness in central and northern Brazil over the next 7-days, but the recent rains have been steady and have likely helped the crop out quite a bit. Brazil has some areas of very low yielding soybeans, but this may be partially priced in at this point.
• Tomorrow, the USDA will release the WASDE report, and traders will be watching the South American numbers closely. Brazil’s estimated soybean production will likely be reduced, but there is a chance that Argentina’s will be increased. US ending stocks for both corn and soybeans are expected to decline slightly when looking at the average trade guesses.
• Today’s export sales report was disappointing for soybeans with 10.3 mb sold for 23/24 which brings this year’s total sales 17% below last year at this time. Last week’s export shipments of 31.7 mb were above the 24.9 mb needed each week to meet the USDA’s estimates. Primary estimates were to China, Mexico, and Japan.

WHEAT HIGHLIGHTS:

• All three US wheat classes posted modest losses of about seven to eight cents for each class across the board. Some weakness may have stemmed from expectations for a relatively neutral report tomorrow in terms of the supply and demand numbers. Also, Paris milling wheat futures posted a reversal from yesterday, in which they took out yesterday’s high but also closed below yesterday’s low. This looks technically weak and offers no support for the US market.
• The USDA reported an increase of only 4.7 mb of wheat export sales for 23/24 and was below the lower end of expectations. However, shipments last week totaled 21.5 mb, which is above the pace of 16.8 mb needed per week to meet the USDA’s 725 mb export goal.
• The average trade guess for winter wheat acreage in tomorrow’s USDA update comes in at 35.9 million acres versus 36.7 in 2023. Some private guesses call for a reduction of up to 2 ma, though the range of estimates is relatively wide with 34.5 ma on the low end to 39.4 ma on the high end.
• The average pre-report estimate of US wheat quarterly stocks as of December 1 is pegged at 1.383 bb, versus 1.780 bb in September, and compares with 1.312 bb in December of 2022. In addition, US wheat ending stocks are expected to come in near unchanged at 658 mb, versus 659 mb in December.
• Turkey, Romania, and Bulgaria have reportedly joined forces to sweep the Black Sea for mines and defuse them. Additionally, other NATO members including the US and UK are being excluded from the operation; this is said to be in an effort to minimize tensions in that region. De-mining these areas will improve shipping safety for Ukrainian vessels carrying grain and other goods. In December, Ukraine shipped 4.8 mmt of grain via their own corridor; this is more than any single month during the export deal with Russia.
• Russia continues to offer the world’s cheapest wheat, with export values falling between $245 to $247 per mt FOB. Russia recently supplied most of the wheat for Egypt’s tender in which they purchased 6-7 cargoes of wheat.

DAIRY HIGHLIGHTS:

• Spot cheese was down just 2 cents today to close at $1.50/lb, and while still up 7.75 cents on the week it rocked nearby Class III futures.
• The February contract fell 35 cents today to move back under the $16.00 mark but is still up 34 cents entering Friday. March and April were around 30 cents lower too.
• The Class IV spot trade saw spot butter down just a quarter-cent while powder was unchanged.
• February Class IV futures finished unchanged but some losses occurred in contracts beyond that. All 2024 contracts remain above $19.00 with some at or above $20.00.
• Tomorrow, the USDA will release its January Supply and Demand report which will also include December 1st Quarterly Stocks and 2024 Winter Wheat Seedings.

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Author

Amanda Brill