CORN HIGHLIGHTS:

• Choppy, but quiet corn market on Tuesday as trade was two-sided before pulling higher into the close.  March corn futures gained a ¼ cent on the session, and the trading range was a narrow 6 cents during the day from high to low.
• Corn prices are consolidating around the 430 level for the March contract. This was the 4th consecutive day trading near this level as the market is looking for news to push prices in either direction.
• A hotter than anticipated CPI data report this morning help push the US Dollar higher, which likely weighed on commodity prices. The stronger inflation levels have made the market concerned that the Fed will keep interest rates higher for a longer period, tightening money supply.
• The corn market is likely supported by near-term demand optimism. Weekly export sales have begun to pick up as US corn is competitive on the global market, and export sales have reflected that fact.  This is a key window for US exporters to accumulate sales for shipment later this year. Currently, US export corn sales are running 30% higher than last year’s poor sales pace.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower after a session of mixed trade which saw prices higher earlier this morning before fading along with soybean meal. Soybean oil managed a higher close with support from Malaysian palm oil.
• Price trends in the soybean meal market are a concern to overall soybean prices. Front month March soybean meal failed to hold the key psychological $350/ton level and posted its lowest daily close since March 2022. The prospects of improved Argentina supplies and strong crush totals in the US are pressuring soybean meal futures.
• Today’s inflation data that was released showed inflation cooling year over year but still above expectations which caused the US Dollar to rally and consequently soybeans and wheat prices to fall along with equity markets that moved sharply lower. The fear is that the Fed will postpone rate cuts that were expected this year.
• Weather in South America has improved significantly this week after a stretch of dryness in Argentina. 23% of Brazil’s soy crop has reportedly been harvested which is well above last year’s pace of 17%. Many analysts still expect Brazilian production slightly below 150 mmt as early yields have been on the low side.

WHEAT HIGHLIGHTS:

• Apart from March Chicago wheat which settled unchanged, all three US wheat classes posted losses today. Pressure stemmed from a sharply higher US Dollar Index, which is now at the highest level since mid-November. The jump in the dollar can be attributed to today’s CPI data in which consumer prices were said to be up 3.1% compared to the same time last year – which was higher than expected. This also pressured equity markets, and at the time of this writing, the Dow is down over 700 points.
• Adding to the bearish tone for the wheat market is the fact that prices in both France and Australia are near two-year lows. This is likely a result of stiff competition out of the Black Sea and from Russia in particular.
• Russia’s Ag Ministry is said to have proposed an increase to the quota on grain exports in 2024 to 28 mmt. The current quota stands at 24 mmt; the changes would apply to wheat, corn, rye, barley and meslin (a wheat / rye hybrid).
• Texas released data on their winter wheat crop yesterday afternoon. The crop condition was downgraded by 4% to 42% good to excellent. However, the poor to very poor category improved from 20% to 19%. By area planted, Texas is the second largest winter wheat producing state in the US, so the decline in the GTE rating may provide some support.
• According to France’s Agriculture Ministry, as of February 1, French farmers have planted 6.2 million hectares of winter crops for 2024 harvest. In total that is down 7.5% from last year and 6.1% from the average. Soft wheat in particular comes in at 4.4 million hectares, which is down 7.7% from last year and 7.5% from the average. The decline in that area is largely blamed on weather issues that disrupted fieldwork and planting.

DAIRY HIGHLIGHTS:

• Class III milk was choppy on the day with the March contract trading as much as 21 cents higher and 12 cents lower than the open before leveling off around a 17 cent gain. Spot trading was also quiet leading to the choppy milk market.
• Cheddar barrels were the only Class III product to see any change on the day, gaining half a cent to settle at $1.60/lb. Blocks and whey were both unchanged from the previous session.
• Class IV was little moved today on lighter volume trading. The 2024 Class IV average closed at $20.62/cwt.
• Butter saw no changes in the spot market staying put at $2.7125/lb, while powder lost 0.75 cents, closing at $1.1925/lb.

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Author

Brandon Doherty