CORN HIGHLIGHTS:

• Corn futures bucked the broader grain market trend on Wednesday, closing with small gains. A strong crude oil market provided support to corn as prices consolidated near the recent rally’s highs.
• Ethanol production declined for the second consecutive week, dropping to 322 million gallons/day, though still 3.9% higher year-over-year. Last week, 111 million bushels of corn were used for ethanol production, remaining ahead of the pace required to meet USDA targets for the marketing year.
• Despite the market strength, average cash basis levels continue to slip in the U.S., impacting the cash market in some areas as producers have been moving bushels into the pipeline on this recent rally.
• Managed hedge funds added to their length in the corn market on last week’s Commitment of Traders report.  Funds were a net long approximately 253,000 contracts as of Jan 7. Estimates have the funds holding a net long of 280,000-300,000 contracts going into today’s trade. If realized, this would be the largest net long position since 2022 for this time frame.
• Crude oil prices surged above $80 per barrel for the first time since sanctions on Russian oil tightened supply. The rally in crude has supported the corn market and other commodities.

SOYBEAN HIGHLIGHTS:

• Soybeans closed lower today, extending losses from yesterday as the March contract marked a lower high and lower low. Early gains in soybean oil, driven by bullish biofuel sentiment, provided support, but prices ultimately faded for a modestly higher close, while soybean meal ended the session in the red. Losses in soybeans were concentrated in deferred contracts.
• NOPA reported December soybean crush at 206.60 million bushels, setting a new record for the month as several new processing facilities have begun operations. This exceeded the average trade estimate of 203 million bushels.
• Yesterday, CONAB raised its soybean production forecast for the current crop year to 166.33 MMT, up slightly from last month.  Most analysts have the Brazil soybean crop above 170 MMT for their estimates as the weather continues to be favorable in the country.
• In Argentina, drier weather persists, and temperatures are expected to heat up over the next two days before rains are expected to fall and provide relief to the soybean crop. Significant rainfall has not fallen in the country since the end of December.

WHEAT HIGHLIGHTS:

• Wheat futures ended with a mixed close across all three classes. Pressure came from a gap lower and weaker finish in Paris milling wheat futures. However, a slide in the US Dollar Index helped ease some of the selling pressure in the US wheat market.
• Drought conditions are expected to expand in the short term across the US southern plains, though longer-range weather models point to increased precipitation for the region in the coming weeks.
• According to the European Commission, EU soft wheat exports have reached 11.5 mmt since the season began on July 1. This represents a 35% drop from the 17.6 mmt shipped for the same timeframe last year.
• Russia’s Deputy Ag Minister has said that due to a smaller harvest, Russia’s wheat exports this year are expected below the record amount shipped in 2024. However, wheat exports in 2025 may be higher than average as a share of total grain exports – this is as a result of export restrictions on corn, barley, and rye in the February to June timeframe.

DAIRY HIGHLIGHTS:

• Class III futures market had modest gains today as February gained 7 cents to close at $19.92 and April gained 18 cents to close at $19.51.
• The spot cheese market lost 5.3750 cents today to close down at $1.83130/lb and spot whey remained unchanged at $0.7375/lb.
• Class IV milk closed down with February and March both giving back 5 cents to close at $20.95 and $20.90.
• Spot butter closed down 0.75 cents to close at $2.5675/lb and spot powder remained unchanged at $1.3675/lb.

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Author

Amanda Brill