CORN HIGHLIGHTS:

• Selling pressure in the soybean market limited gains in corn as prices finished slightly lower. March corn lost 1 cent on the day. Corn prices are still consolidating, closing around the 447 level for the 3rd consecutive day.
• Weekly Export sales for corn were towards the top end of expectations. The USDA reported new sales for the current marketing year at 47.5 mb (1.207 mmt). Japan was the top buyer of US corn last week. Total commitments are at 1.326 bb, which is up 31% from last year.
• The National Corn index is trading 23 cents under the March futures, and declining, reflecting the large front-end supply of corn. Cash basis levels should remain steady to softer in the near term and the weather has improved, allowing for better movement of the corn supply.
• Despite ethanol production rebounding, slower production over the past two weeks, due to weather, has tightened ethanol stocks. The ethanol grind and corn usage may have to tick up in the next couple weeks to rebuild the ethanol stockpile.
• Argentina weather has been a focus in recent sessions. Afternoon weather models will likely dictate overnight trade. Models moved some moisture chances back into the weekend, which limited strength in the corn and soybean markets.

SOYBEAN HIGHLIGHTS:

• Soybeans closed significantly lower today following two consecutive days of higher prices. Today’s export sales report was very poor, and both soybean meal and oil moved lower and pressured soybeans. There was a flash sale reported, but it was overshadowed by the low export number.
• For the week ending January 25, the USDA reported an increase of 6.0 mb of soybean export sales for 23/24. This was a marketing year low, below the lowest trade guess, and down 19% from the previous year. Export shipments of soybeans last week were 34.9 mb and were above the 23.3 mb needed each week to meet the USDA’s estimates. Primary destinations were to China, Egypt, and Mexico.
• This morning, private exporters reported a flash sale of 206,834 metric tons of soybeans to Mexico which was a bit unusual as Mexico primarily buys US corn. The poor export sales were a result of net cancellations of 407,400 metric tons of soybeans by unknown destinations. China and other countries are likely canceling US purchases to seek out cheaper Brazilian offers.
• South American weather is currently mixed with Brazil receiving scattered showers while Argentina is still dry with its forecast not set to turn more favorable for another five days or so. Estimates for Brazilian production have slipped to around 145 mmt while Argentinian estimates have risen to 42 mmt.

WHEAT HIGHLIGHTS:

• The wheat complex ended the day mixed with both Chicago and Minneapolis in the green, while KC closed lower. Today marked the third day in row of back-and-forth consolidation with little fresh market moving news to trade, while the market attempts to balance reduced 2024 US acres with solid HRW crop ratings.
• Today’s weekly export sales report released by the USDA showed net sales for the week ending January 25, at 11.84 mb (322.5k mt). Bringing total 23/24 sales to 620 mb versus the USDA’s forecast of 725 mb.  Last week’s sales represent a 29% drop from the previous week and a 9% drop from the 4-week average.
• In international trade, Taiwan issued a tender to purchase an estimated 89,650 mt of milling wheat from the US to the Taiwan Flour Millers’ Association. Jordan’s state buyer issued an international tender to purchase up to 120k mt of optional origin milling wheat, and Bangladesh also issued an international tender for 50k mt of milling wheat.
• India is predicted to have a warmer-than-normal February, which may be detrimental to the country’s wheat crop as it enters its filling stage. A significant drop in yield may force the country to continue its export restrictions for a longer period of time.
• One private group raised its estimate of Russia’s wheat crop by 2.2 mmt to 90.2 mmt, 0.8 mmt under the USDA’s 91 mmt forecast. The group also increased its estimate of Australia’s wheat crop 1.5 mmt to 27 mmt versus the USDA’s 25.5 mmt. but lowered the EU crop by 3.1 mmt to 133.7, just under the USDA’s current 134.3 mmt estimate.

DAIRY HIGHLIGHTS:

• Class III futures caught a bid again today with the now second month March contract gaining 61 cents to move to $17.52.
• Spot cheese was 1.8750 cents higher to $1.60375/lb, its highest close since December 7th, while spot whey pushed over $0.50/lb for the first time since July 2022.
• On the other side, Class IV futures were pretty quiet with a few contracts catching a bid higher on light volume. Second month March finished down two pennies at $19.90.
• Spot butter is entering Friday’s trade down 2 cents on the week at $2.7450/lb, while powder has gained a penny in the last four days, closing unchanged Thursday at $1.23/lb.

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Author

John Heinberg