CORN HIGHLIGHTS:

• On a day with a lot of data, corn futures finished lower on the day. March corn lost 1 cent, but again posted a new contract low and low close during the session as the market digested CONAB, USDA and weekly export information.
• The USDA raised the U.S. corn carryout by 10 mb to 2.172 billion bushels by making a small reduction of 10 mb to the industrial usage of corn. This carryout increase was above market expectations, which were looking for a small decrease month over month.
• Regarding South American production, the USDA made minimal changes to their Brazil and Argentina corn production forecasts. The USDA left Argentina unchanged at a projected crop of 55 MMT from last month, but lowered the Brazil forecast by 3MMT to 124 MMT.
• The Brazil Ag Agency, CONAB, released their month production numbers for corn this morning. CONAB dropped their corn production forecast to 113.7 MMT, down from 117.6 in January. The USDA is at 124 MMT. CONAB lowered their demand forecast and export projections to reflect a possible increase in total corn carryout at the end of the market year, despite the reduced production.
• Weekly export sales for corn were near the top end of expectations. Last week, U.S. exporters posted new sales of 1.219 MMT (48.0 mb). Total sales commitments are reaching 1.374 billion bushels, up 30% from last year. USDA announced a flash export sale of 200,000 MT (7.1 mb) of corn to Columbia this morning. This was the second announce flash sale this week, as the U.S. corn export window is open and available.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day slightly higher after a day of volatile trade, which saw March soybeans as low as $13.80-1/2. The WASDE report was relatively bearish, but the data that was released by the USDA was in conflict with earlier data released by Brazil’s CONAB. Soybean meal ended the day lower, while soybean oil was higher, along with higher crude oil.
• Today, the USDA released its WASDE report, which had a bearish tone for soybeans. The US carryout for 23/24 was increased to 315 mb from 280 mb due to a decrease in exports. Brazilian soybean production was only lowered to 156 mmt from 157 mmt last month when the average trade guess was closer to 153 mmt. Argentinian production was unchanged at 50.0 mmt.
• Brazil’s CONAB also released estimates for production, but they were in stark contrast with the USDA’s estimates with 149.40 mmt of soybeans expected and 113.70 mmt of corn expected. Traders seemed unsure about which agency was correct, which caused volatile trade.
• Today’s export sales report was poor for soybeans, with sales below the lowest range of estimates at 12.5 mb for 23/24. This was down 25% from the prior 4-week average. Export shipments of 60.8 mb last week were well above the 22.7 mb needed each week to meet the USDA’s estimates, and primary destinations were to China, the Netherlands, and Mexico.

WHEAT HIGHLIGHTS:

• All three US wheat futures classes posted double digit losses today. The WASDE report was relatively neutral when it came to the wheat numbers, but futures were under pressure even before the data was released. This is likely a result of continued cheapness of Russian offerings, along with some meteorologists predicting that the polar vortex may not dip into the US at the end of the month, potentially eliminating the threat of winterkill.
• On today’s report, the USDA projected US wheat carryout at 658 mb, up from the average trade guess of 649 mb and the January estimate of 648 mb. In terms of global numbers, wheat ending stocks were projected at 259.4 mmt, down just slightly from an average pre-report estimate of 260.1 mmt and a 260.0 mmt estimate in January.
• As far as additional data, total wheat use was estimated at 1.869 bb, down from 1.879 bb last month. Globally, world wheat production was pegged at 785.74 mmt, up from last month’s estimate of 784.91 mmt. Other notable figures include Australian production at 25.5 mmt, unchanged from last month, and Ukraine exports at 15.0 mmt vs 14.0 mmt in January. Additionally, Russian exports were kept the same at 51.0 mmt.
• The USDA also reported weekly export sales today and said there was an increase of 13.9 mb of wheat export sales for 23/24 and an increase of 0.3 mb for 24/25. Shipments last week at 11.6 mb were behind the pace needed of 17.2 mb every week to meet the USDA’s goal of 725 mb. On today’s report, that export estimate was unchanged from last month.
• According to their Bureau of Meteorology, Australia had their warmest winter on record. Additionally, it was their eighth warmest year on record overall. Furthermore, as claimed by Copernicus, Europe’s Earth observation agency, globally 2023 was the hottest year on record.
• Statistics Canada also released data today. They said that as of December 31, 2023, wheat stocks fell because of lower production, down 10.3% year over year at 20.7 mmt. Moreover, wheat exports at 10.6 mmt were up 2.7%, which surpassed the five-year average.

DAIRY HIGHLIGHTS:

• While spot whey pushed to a new 20-month high of $0.52/lb today, spot cheese gave back a penny to close at $1.5850/lb.
• This had nearby milk giving back 11 to 14 cents while contracts from the spring on were mixed. The 2024 average finished Thursday at $17.74.
• Class IV futures were mostly lower as well with the second month March down 13 cents to $20.06 on 30 trades.
• Spot butter enters Friday unchanged for the week at $2.7450/lb as traders have stepped to the sidelines this week. Powder is down 2.25 cents so far to $1.2025/lb.

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Author

Brandon Doherty