CORN HIGHLIGHTS:
- Corn futures ended Monday lower, pressured by weakness in other grains. The March contract closed 12 cents below its recent high, marking its second consecutive session of losses as upward momentum stalled.
- Better-than-expected weekend rains in Argentina weighed on corn and soybean markets. Forecasts for February also look favorable for crop production in areas previously stressed by heat and dryness.
- Demand remains robust, with the USDA reporting a flash sale of 139,000 MT (5.5 mb) of corn to Mexico for the current marketing year. Weekly export inspections reached 1.247 MMT (49.1 mb), 31% ahead of last year and trending above USDA export targets.
- The key second corn crop planting pace in Brazil is behind expectations as approximately 2.2% of the crop was planted as of last week. Though still early, a later planting window could push the crop’s finishing point past a key time window closer to maturity and possibly limit production.
- Managed hedge funds continue to grow their long position in the corn market, adding nearly 20,000 net long contracts to a total position of 311,678 net long contracts. This is the fourth most bullish position ever held for this date.
SOYBEAN HIGHLIGHTS:
- Soybeans closed lower for the second consecutive session after March futures failed to hold above the 200-day moving average last week. Long liquidation by funds may have followed a weekend of uncertainty, with President Trump briefly imposing and rescinding tariffs on Colombia, creating a bearish sentiment for grains.
- Both soybean meal and oil ended the day lower with meal picking up the larger losses. Rains fell over Argentina this weekend, which was sorely needed, but soybean oil may be under pressure from the 45z tax credits that may not be implemented.
- While Argentina has received needed rain, Brazil continues to rain through what should be the start of harvest. The country is reportedly just 4% completed with harvest compared to the average of 13% for this time of year. Rain is forecast to continue over the next 15 days.
- Friday’s CFTC saw funds as buyers of soybeans by 5,497 contracts as of January 21. This left them with a net long position of 40,330 contracts. Since that day, they are estimated to have sold approximately 2,000 contracts.
WHEAT HIGHLIGHTS:
- Wheat posted losses alongside the broader grain complex as markets turned risk-averse. Weakness was tied to a sharp selloff in tech stocks, with the NASDAQ down over 700 points. The drop followed news of Chinese AI company DeepSeek releasing a cheaper, more efficient model, raising concerns about the valuation of U.S. AI firms.
- Weekly wheat inspections totaled 17.8 million bushels, bringing the 2024/25 season total to 506 million bushels, up 25% year-over-year. Inspections remain ahead of the pace needed to meet USDA’s export estimate of 850 million bushels, which is 20% higher than last year.
- The Commodity Weather Group estimates up to 15% of the U.S. winter wheat crop may have been killed by recent sub-freezing temperatures. Areas with little to no snow cover were hit hardest, with 65% of HRW and 35% of SRW regions reportedly affected.
- Ukraine’s agriculture ministry has indicated that their country intends to plant 11.1 million hectares of grain for 2025, which is in line with last year. Of that total, winter grains (which will consist mostly of wheat) are expected to reach 5.2 million hectares.
DAIRY HIGHLIGHTS:
- Class III milk reversed a good chunk of last week’s losses to start the new week. February futures closed up 65 cents at $19.95.
- Spot cheese was up 2.8750 cents from Friday to finish at $1.8550/lb. Spot whey was unchanged.
- Class IV futures were under pressure today with the February through June contracts down 6 to 15 cents.
- Both Class IV spot products were unchanged today with spot butter at $2.53/lb and powder at $1.3475/lb.
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