CORN HIGHLIGHTS:
- Strong buying moved into the grain markets on Wednesday, and that supported corn futures’ strong gains on the session. Corn futures contract broke to new nearby highs as money flowed into the grain markets. The March corn contract posted its highest close since May 28.
- Weekly ethanol production fell 7.6% to 1.015 million barrels/day but remains 2.4% above year-ago levels. The weekly grind used 102.4 mb of corn, slightly below the pace needed for USDA targets.
- The USDA will release weekly export sales on Thursday morning. Expectations for new sales to range from 850,000 – 1.8 MMT. As U.S. corn is still very competitive in the global export market. Last week, sales were 1.660 MMT.
- Corn eased from session highs as President Trump reaffirmed a Feb. 1 deadline for potential tariffs on Mexico and Canada, raising concerns over retaliatory measures from Mexico, the top U.S. corn buyer.
- Weather forecast for central Brazil look to stay on the wetter side. Additional rainfall may limit soybean harvest pace, which would slow the planting pace of the key second crop Brazil corn. The second crop Brazil corn is the main crop that competes against U.S. bushels on the export market.
SOYBEAN HIGHLIGHTS:
- Soybeans closed higher, with March futures targeting the 200-day moving average at $10.73. Strength came from a sharp rally in soybean meal due to Argentine crop concerns, while soybean oil ended lower.
- The U.S. export window to China is closing unless President Trump can convince China to agree to Phase 1 purchase obligations. China is on a holiday through most of next week which could cause some delays in negotiations.
- In Argentina, just 20% of the soybean crop is setting/filling pods, and adequate soil moisture levels have fallen from 81.1% to 54.8 since the beginning of the year. Recent rains are expected to improve conditions.
- A Brazilian port found 51 cargoes of soybean meal contaminated with sand during inspections. This follows China rejecting multiple soybean shipments over phytosanitary concerns.
WHEAT HIGHLIGHTS:
- The wheat market closed sharply higher with double-digit gains across all three classes. Higher corn and soybeans, as well as higher Matif wheat futures both played a part in boosting US wheat. Funds likely covered short positions amid concerns over Russian winterkill.
- Following Argentina’s export tax cut, its FOB wheat prices are now $11/MT below Russia’s $225/MT offers. Increased Argentine exports could cap upside potential for U.S. wheat.
- This afternoon, the Federal Reserve announced no change to interest rates, as inflation remains elevated. This was largely in line with expectations, and at the time of writing the US Dollar Index is only slightly higher for the day.
- According to the European Commission, EU 24/25 soft wheat exports as of January 26 have reached 12.18 mmt since the season began in July. This falls well below the 19.35 mmt shipped for the same timeframe last year.
DAIRY HIGHLIGHTS:
- Class III milk futures saw a decline today, with the February contract losing 5 cents, settling at $20.34, while the March contract dropped 7 cents to close at $20.02.
- Spot cheese continues on its upward trend adding another 2 cents today to close at $1.8975/lb. Whey lost 0.75 cents to close at $0.6900/lb.
- Class IV milk futures continued to receive pressure mid week closing down, March and April both lost 13 cents to close at $20.05 and $20.10.
- Spot butter continued to drop today giving up another 4 cents to close at $2.4600/lb. Powder also closed down loosing 0.25 cents to close at $1.3450/lb.
Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.