CORN HIGHLIGHTS:

• Trade was quiet in the corn market as prices consolidated at the top of yesterday’s range. March corn futures finished ½ cent higher in a narrow trading range of only 5 ½ cents.
• The corn market was lacking news overall and was likely a follower of other grains. Weakness in the wheat market limited gains, but a late push higher by soybeans helped pull corn futures off the lows for the day.
• Argentina weather has been a focus in recent sessions. Afternoon weather models pushed some moisture chances until later in the weekend, which helped support the corn and soybean markets into the close.
• Weekly ethanol production rebounded but was still a disappointment. Last week, ethanol production was 991k bd, up from 818k bd last week, but was still 5% below last year’s level. Production has dropped below the pace to hit USDA market year corn usage target. Last week, only 99 million bushels of corn were used in the ethanol grind.
• The USDA will release weekly corn export sales on Thursday morning. This is a key export window for US corn against global suppliers. Expectations for new sales to range from 800,000 – 1.3 mmt. Last week corn sales were 954,796 mt.
• With Managed Money holding an extremely large short position in the corn market, the recent price strength could lead to additional short covering going into tomorrow’s session, but export demand will be a key as the market works through a perceived heavy front end corn supply.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher for the second consecutive day with support from higher soybean meal. Prices were lower for the majority of the day but rebounded into the close. Soybean oil was mixed and near unchanged with the front month ending higher but deferred months slightly lower.
• There has been little fresh news for the markets to trade on, but it is the last day of the month and non-commercials may be covering a portion of their short position. Yesterday, funds were estimated to have bought back 10,000 contracts of soybeans and likely bought more back today. They still hold a large net short position.
• The Brazilian soybean crop is now above 11% harvested, but production estimates are being dialed back again with Ag Resource pegging the total at 145.50 mmt which compares to 150.7 mmt in the previous forecast. The country’s soybean exports are expected to reach 2.49 mmt in January, well over the exports at this time a year ago.
• In Singapore, demand for biodiesel has more than tripled since 2022 for marine use in the Port of Singapore. Imports of seed oils from China rose by 30% in 2023, and this points to the growing use of soybean oil and other seed oils as biofuel globally.
• On tomorrow’s USDA census crush report, trade is expecting a record December US soybean crush at 206 mb. If true, that would be up from 200 mb in November, and compares to 187 mb last year.

WHEAT HIGHLIGHTS:

• Despite corn and soybeans coming back at the close, wheat could not do the same and posted losses in all three classes. No support came from Matif futures, in which the front month March lost three Euros per mt and had a new contract low close.
• There has been talk that since China will allow imports of Argentinian wheat for the first time, Brazil may purchase their wheat needs from the US, compared to what they normally get from Argentina.
• According to Anec, January wheat exports in Brazil are anticipated to increased 5.2% when compared to last year, at 685,171 mt. Overall Brazil is a net importer of wheat but exports the lower quality portions of grain with 90% of it going to animal feed.
• A group of flour mills in South Korea has issued a tender for 100,000 mt of wheat to be sourced from the US and Australia. Taiwan is also tendering for US wheat, and Jordan has issued an international tender for 120,000 mt. At any rate, Russia remains the dominant exporter without much sign of slowing down. Their crops are also reportedly rated 96% good to satisfactory.
• This afternoon the Fed announced that they will hold rates steady, marking the fourth time in a row that there was no change. The US Dollar Index is not showing much response as of as of writing, with it right around the neutral level, although it has been on both sides of that today. According to the committee, rates will not see any cuts until there is greater certainty that inflation is approaching two percent.

DAIRY HIGHLIGHTS:

• The US spot whey market caught a 1.75c higher bid on Wednesday and closed at $0.47/lb, its best daily close since September of 2022.
• There was a pause in cheese demand, which kept Class III futures on the defensive. February Class III fell 12c to $16.10 while March lost 2c to $16.91.
• Class III futures did find some late-session buying, though, and closed well off the lows. The market is holding onto the recent rally fairly well.
• Nearby Class IV milk worked back upwards to near the $20.00 per cwt level once again. There was steady bidding across the board.

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Author

John Heinberg