- A disappointing day in the corn market as prices pushed to new contract lows during the session. March corn lost 4 ½ cents and closed at a new contract low close of 434 ¼. March corn futures traded flat or lower for the past five trading sessions.
- Corn prices were pressured by selling in the soybean market, and concerns regarding demand. The market was hearing rumors of China purchasing cheaper Ukrainian corn on the export market. The trending higher dollar has helped put pressure on US export prices.
- The USDA will release the next WASDE report tomorrow at 11:00 CST. The focus of the market will be tied to any demand adjustments in the US corn balance sheet. Expectations are for US corn carryout to be decreased slightly to 2.134 billion bushels, down 30 mb from last month on some possible demand increases. A key emphasis in the report will be adjustments made to the Argentina and Brazil soybean and corn crops.
- The USDA will release weekly export sales on Thursday morning, and expectations are for improved activity on corn export sales. Analysts feel sales will range from 600,000 – 1.3 mmt for sales last week. On last week’s report, US exporters sold 1.206 mmt of corn.
- Ethanol production improved last week as production reached 1.033 barrels/day, up 4.2% over last week and 3.3% over last year. Ethanol stocks were up 2.1% week over week. Corn used in ethanol production last week was estimated at 102.53 mb, just slightly under the target needed to meet USDA’s estimates of 5.375 billion bushels of corn used in the 23/24 marketing year.
- Soybeans ended the day lower after two consecutively higher closes on Monday and Tuesday. Better rain forecasts in South America, poor export demand, and concerns about Chinese purchases being cancelled. Soybean meal ended the day lower, while soybean oil was higher.
- Rumors of China being a purchaser of Argentina soybeans on the export market weighed on Soybean prices. Market analysts feel that the Argentina purchases could be meet with cancellations of US origin soybeans by China of existing sales.
- December exports of US soybeans were just 4.8 mmt and were 33% below the 5-year average for the month. The lack of Chinese purchases from the US has weighed on prices as China looks to Argentina and Brazil for their soy purchases. Weather in South America has improved lately, and the forecast looks friendly.
- Tomorrow, the USDA will release the next WASDE report. Expectations are for US soybean carryout to increase slightly to 284 million bushels, up 4 mb from last month. A key emphasis in the report will be adjustments made to the Argentina and Brazil soybean and corn crops.
- The USDA will release weekly export sales on Thursday morning. Expectations for new sales range from 400,000 – 1.4 mmt. Last week, sales were disappointing at just 164,000 mt, and below analysts’ expectations. The past two Thursday sessions, March soybeans have lost 17 cents and 19 cents respectively after the export sales report.
- Wheat closed higher across the board in the Chicago contract, but was mixed in KC, and just slightly higher in MPLS. Bull spreading was again noted in the Chicago futures, which may indicate more short covering by the funds ahead of tomorrow’s WASDE report. Additional short covering may be taking place due to the extended weather forecast, in which a polar vortex is expected to bring cold temperatures to US winter wheat areas in late February; the threat of winterkill is likely the main concern.
- Ukraine grain exports have surpassed last year’s amounts for the second month in a row. January exports at 5.3 mmt are well above the nearly 4 mmt from a year ago. While 60% of this is said to be corn, the remaining percentage is largely wheat. However, perhaps more importantly, it should be noted that Ukraine is exporting these ag goods without the help or approval of Russia.
- Tomorrow, the USDA will release its February WASDE report, and the average pre-report estimate for US 23/24 wheat ending stocks comes in at 649 mb, up 1 mb from January. In terms of global carryout, the average guess for wheat is pegged at 260.1 mmt versus 260.0 mmt in January. Not many changes are expected for wheat tomorrow, but it is possible that the USDA will lower exports due to strong global competition, especially out of the Black Sea.
- Giving wheat a boost today, the US Dollar Index has faded off of Monday’s high and is back below the 100 day moving average. The bigger question, as it relates to the economy, may be regarding China. They are attempting to stimulate their equity markets and consumer confidence. If successful, this may positively impact their demand for ag goods.
- In addition to tomorrow’s USDA report, Stats Canda will release their estimate of December 31 wheat stocks. All wheat is projected at 20.7 mmt, down from 22.3 mmt a year ago. As to whether the USDA will make a similar adjustment is up in the air. However, US ending stocks are the second tightest in a decade, and global stocks are tight as well, both of which may offer long term support to the market.
- Tuesday’s GDT Auction saw the GDT price index add 4.20% to post its best close since October 2022. This was the fifth up auction in a row.
- Within the auction, GDT cheese moved to over $2.00/lb, butter hit 12-month highs, and the powder market added about 4%.
- Tuesday’s US spot trade saw more offering in cheese, however, which kept futures on the defensive. Cheese was unchanged on Wednesday and whey fell a penny, keeping the market red once again.
- A lack of follow-through support in the US spot trade could keep the market on edge. For example, US cheese is now 40c below the global market, but the US price doesn’t seem to want to budge much over $1.60/lb.
- On Wednesday, March Class III fell 12c to $17.33 while March Class IV was steady at $20.19.
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.