The CME and Total Farm Marketing offices will be closed Monday, February 19, in observance of Presidents Day

CORN HIGHLIGHTS:

• Corn futures were mixed as prices squared up off losses for the week going into the 3-day weekend. March futures lost 1 ¼ cents on the session, setting a new contract low and close. For the week, March futures traded 12 ½ cents lower, closing lower for the third consecutive week.
• The USDA Outlook Forum projections detailed the possibility of growing corn supplies into the next marketing year. The forecasted new crop carryout of 2.532 billion bushels put the Stocks–to-use ratio at 17.22%, which would be the highest ratio since 2006, which represents a burdensome potential corn supply.
• Weakness in the wheat market spilled over and limited rally potential in the corn market.  Wheat futures broke to new contract lows as US wheat is still expensive on the global scale.
• The March futures contract is closing in on First Notice Day, February 29. In this window, producers with basis contracts and commercials with a large net long position in the corn market will need to roll to the next month or price bushels against the basis. This can add additional selling pressure to the already weak corn market.
• Managed and hedge funds are still pushing their possible record short position in the corn market as the market looks for bullish news. Funds were short 297,000+ net contracts last week on the Commitment of Traders report, and that position has likely grown given the market weakness.

SOYBEAN HIGHLIGHTS:

• Soybeans closed higher to end the week as non-commercials likely took profits on their short positions. There was very little friendly news this week to support prices with bearish Outlook Forum numbers from the USDA and poor export sales. Soybean meal closed higher but soybean oil was lower.
• For the week, March soybeans lost 11 ¼ cents to end at 1172 ¼, March soybean meal lost $1.20 to end at $345.60, and March soybean oil lost 1.67 cents to end at 45.59 cents. Non-commercials were likely large sellers across the soy complex again this week with a near-record large short position.
• In Brazil, a spokesperson for the Ag Ministry has said that they expect total production for the 23/24 soybean crop to come in at 145 mmt or lower but estimates out of Brazil remain in stark contrast with the USDA’s last estimate of 156 mmt. Either way, total South American production should be above last year.
• Some positive news came from strong NOPA crush numbers yesterday but were still below the previous month, with the harsh January weather likely being a contributing factor. 185.8 mb of soybeans were crushed, which was below expectations but still a record number for January.

WHEAT HIGHLIGHTS:

• The wheat complex ended the day in the red with all three classes posting heavy losses for the week; -35 ¼ cents in Chicago; -34 ¼ cents in KC; and -29 ¼ cents for Minneapolis. While March Chicago continues to hold above last November’s low of 556 ¼, both KC and Minneapolis wheat printed fresh contract lows in the March contracts.
• The recent drop in US wheat prices has done little to help the US competitiveness in the world export markets. The US still finds itself between $25 and $30 per tonne more expensive than Russian and Ukrainian offers, which continue to dominate the world wheat market.
• IKAR raised its forecast for Russia’s 2024 grain production to 146 mmt which includes 93 mmt of wheat. The updated forecast is just above the USDA estimate of 91 mmt and it lines up with SovEcon’s latest forecast of 93.6 mmt. IKAR also raised its export estimate to 52 mmt, 1 mmt above the USDA.
• The European firm Strategie Grains released its latest estimate of EU wheat production, and it came in at 122.6 mmt, near unchanged from last month. The firm noted high wheat ending stocks for the 23/24 season due to competition from Russia, and imports from Ukraine.
• Later this afternoon, the CFTC will release its Commitment of Traders report showing net positions for large speculative and commercial institutions as of Tuesday, February 13. Given the steep declines that occurred late this week, it is unlikely that this update will show substantial increases in net short positions. But, based on recent activity, it is estimated that Managed Funds hold a net short position totaling 80,000 contracts in Chicago wheat.

DAIRY HIGHLIGHTS:

• Class III futures were mixed on Friday’s trade action, but lower on the week. March futures gave back 14 cents, while April surrendered 26.
• Spot cheese gained two cents in today’s trade, but dropped 3 cents for the week, closing at $1.54375/lb. Spot whey was unchanged this week at a solid $0.52/lb.
• Class IV milk contracts were mostly green on the week, thanks to a spot butter recovery. March closed at $19.99, up 2 cents this week.
• Spot butter posted a solid week, gaining six cents overall to push back above the $2.70 mark, closing today at $2.75/lb. Spot powder was under pressure, however, losing 3 cents this week with a $1.17/lb finish.

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Author

John Heinberg