CORN HIGHLIGHTS:

• Overnight strength from Thursday’s positive ethanol grind data quickly faded on the open of today’s session as US jobs data came in far above expectations and rallied the US dollar, which likely weighed on Ag futures across the board. March corn closed the day 4 ½ cents lower, with a 3 ½ cent loss for the week.
• Thursday afternoon, the USDA released its Grain Crushing’s report that showed 482 mb of corn were used in December 2023 for the production of ethanol. Usage came in above expectations and at the highest level in 5 ½ years. It also represented a 5% increase from November and was 13% higher than a year ago.
• The Buenos Aires Grain Exchange reported that 98% of Argentina’s corn crop is planted, and as a testament to the hot and dry conditions, 11% of the crop is rated poor to very poor, a 5% increase from last week.
• On the flip side, the US Ag attaché in Argentina raised its estimate of Argentina’s corn crop by 2 mmt to 57 mmt. By comparison, the USDA is currently forecasting a 55 mmt crop.
• The US drought monitor continues to show significant improvement over this time last year. As of yesterday’s update, the drought monitor shows 28% of the corn areas in drought versus last year when it showed 45%.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day significantly lower again to end the week with pressure from Brazil’s advancing harvest, lower soy products, and poor export sales. Soybean meal has been rangebound for the past few weeks, while soybean oil has trended lower on increased supply and demand concerns.
• For the week, March soybeans lost 20-3/4 cents, March soybean meal gained $7.80, and March soybean oil lost 2.20 cents. Today, nearly all of the grains fell sharply after unemployment numbers were released. This caused the dollar to rise as traders feel that the Fed will further delay dropping rates.
• Soybeans would likely be trading even lower if not for the good domestic crush demand. Yesterday’s Fats and Oils report from the USDA showed that total soybean crush for December was 204 mb, 17 mb above this time a year ago and a new monthly record. Better export demand would be needed for prices to move higher.
• Scattered showers continue to fall throughout Brazil, but the northern region would benefit from drier weather at this point to progress with harvest. Argentina is expected to remain hot and dry throughout the weekend before rains begin to fall again, and it is unknown if the recent hot and dry spell will reduce production estimates.

WHEAT HIGHLIGHTS:

• With the US Dollar up sharply after the jobs report, wheat struggled to hold onto earlier gains and closed mixed amongst the three classes. The report showed that 353,000 jobs were added, but perhaps more importantly, unemployment was steady at 3.7% compared to the expectation for an increase to 3.8%.
• Paris milling wheat futures also faded off of earlier highs, which may have also offered weakness to the US market by the close. The March Matif contract posted small gains, while May was down a bit. This is somewhat disappointing given yesterday’s strong bullish reversal off contract lows.
• According to FAO-AMIS, the estimate of global 23/24 wheat stockpiles was increased from 319.3 mmt to 319.7 mmt. Corn production and stockpile estimates were also raised, but soybean stocks were reduced.
• Compared to last year, Russia is estimated to have increased grain exports by 23% in the period of July 1 through January 31. Data suggests that during that period, they exported 38.5 mmt of grain. Turkey was the leading wheat importer at 4.349 mmt with Egypt next in line at 3.577 mmt.
• New Zealand’s National Institute for Water and Atmospheric Research has said that there is a 100% chance of El Nino lasting through April. Additionally, there is a 65% chance that the weather pattern will return to neutral conditions in the May – July timeframe.

DAIRY HIGHLIGHTS:

• Spot Cheddar ended the week 9.625 cents ahead of last week on better demand. Spot cheese has improved nearly 20 cents since the end of December. It seems US cheese being the cheapest on the globe has finally brought buyers back into the market.
• The whey market continues to improve closing at its best level since June 2022 at $0.5075/lb.
• Class III futures looked like they were ready to break out again before reversing dropping 14 cents on the March contract and 2 cents on the Class III average. The Class III average now sits at $17.79/cwt,
• Spot butter went unchanged on the day to close 1.50 cents lower than this time last week. However, when looking at the averages for the week, butter actually averaged 15 cents better this week than last.
• Class IV futures held together today with the front month contract gaining 20 cents to close at $20.00/cwt. The Class IV average also improved by 2 cents to close at $20.34/cwt.

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.

Author

Brandon Doherty