CORN HIGHLIGHTS:

• The front end of the corn market came under strong selling pressure as the USDA WASDE report failed to make any changes to the U.S. corn balance sheet. The weak technical close and selling momentum into the end of the session could leave the corn market open to additional selling pressure going into tomorrow’s session.
• The USDA kept 2024/25 corn ending stocks at 1.540 billion bushels, while analysts had expected a 15 mb reduction due to strong demand. The higher-than-anticipated carryout led to long liquidation.
• The USDA lowered forecasted production for Argentina by 1 MMT and Brazil by 1 MMT reflecting the difficult start to the growing season in some regions. However, February weather conditions in both regions have improved.
• The cash market has seen soft basis action, which could be an indicator that corn supplies are in the pipeline and front-end demand could be cooling. The corn market is moving toward a key pricing window as the March contract nears First notice day at the end of February.

SOYBEAN HIGHLIGHTS:

• Soybeans ended lower after a neutral WASDE report failed to provide the bullish support traders were hoping for. Prices were up earlier in the day but retreated as the report offered no surprises. Soybean meal led the decline on improving Argentinian weather, while soybean oil found support from rising crude oil prices.
• The WASDE report held U.S. ending stocks steady at 380 mb, despite market expectations for a slight reduction. Global soybean ending stocks dropped to 124.3 mmt from 128.4 mmt, in line with forecasts.
• Regarding South America, the USDA did make some changes to South American production. In Argentina, soybean production was lowered by 3 mmt from last month to 49.0 mmt. This was expected given the recent dry spell in the country. In Brazil, soybean production estimates were left unchanged at 169 mmt, but some analysts have estimates closer to 171 mmt.
• Brazil is reportedly 15% done with its 24/25 soybean harvest as of February 6. Prices in the country have been firm as strong export demand has kept supply limited.

WHEAT HIGHLIGHTS:

• Wheat futures closed lower across all three classes, as a relatively uneventful WASDE report failed to generate much buying interest despite being mildly supportive. The broader weakness in corn and soybeans likely added pressure to the wheat complex by the session’s end.
• The report lowered U.S. 2024/25 wheat ending stocks by 4 mb to 794 mb, while traders had expected a slight increase to 800 mb. Global wheat carryout also declined from 258.8 mmt to 257.6 mmt, contrary to trade expectations for a steady figure.
• US wheat exports were unchanged at 850 mb, with imports also holding steady at 130 mb. Australian wheat production was untouched at 32 mmt, but Argentina’s did increase by 0.2 mmt to 17.7 mmt. Meanwhile, Russian and Ukrainian exports were both dropped by 0.5 mmt, to 45.5 mmt and 15.5 mmt respectively.
• Brazilian wheat prices remain firm amid limited supplies. January wheat imports totaled 716,900 mt, marking the highest monthly volume since April 2020 and the largest January total since 2008.
• According to the French farm ministry, their estimate of soft winter wheat plantings has increased. For the 2025 harvest, the forecast was raised from 4.51 million hectares in December, to 4.57 million hectares as of Tuesday. Furthermore, this new estimate is 10% above 2024 and 0.4% above the five-year average.

DAIRY HIGHLIGHTS:

• A quiet spot cheese trade kept Class III milk futures in check on Tuesday. Block cheese was up 0.50c while barrels gained 0.25c.
• Spot butter finally found some aggressive buyers, as the price rallied 5c to $2.43/lb on 12 loads traded. This was the biggest up day of the year for spot butter.
• Butter futures were green across the board, while cheese, powder, and whey were all mixed to lower.
• Volume was incredibly light for the Class III trade, with just 809 contracts trading in total for the 2025 strip.
• Spot whey lost another 2c to $0.5675/lb. Sellers are active.

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Author

Brandon Doherty