CORN HIGHLIGHTS:

• Corn futures stayed under selling pressure for the third consecutive session as the March futures lost 6 ¼ cents and May lost 5 cents. This is the 12 lower session in the last 16 trading sessions, and March corn closed under the key 400 psychological price level. The last time corn closed under 400 was in October of 2020.
• The month of February has been difficult on the corn market as prices were down 16 ¾ cents on the week and have lost 48 ½ cents so far this month. This month saw a combination of factors, basis contract pricing, March option expiration, and First notice day approaching on the 29th, which have all added to the market volatility.
• Weekly export sales for corn were within trade expectations, but softer compared to previous weeks.  Last week, the US sold 32.3 mb (820,400 mt) for the 23/24 marketing year. This was down 37% from the previous week and 30% from the prior 4-week average. Total sales are still running up 29% from last year.
• The Brazilian corn market traded sharply lower on the session, testing limit down during the day. Rumors of China buying Ukrainian corn at less than $230/mt, cheaper than US and Brazil prices pressured the corn market.
• On Thursday’s report, weekly ethanol production ticked up last week to 1.084 million barrels/day, up 5% from last year. Ethanol stocks slipped to 25.5 million barrels, and 108.6 million bushels of corn were used last week in ethanol production, which is still running ahead of USDA expected pace for the marketing year.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day significantly lower for a third consecutive day and have lost 45 cents just within these last three days. Export sales were very poor, weather in South America has been favorable, and non-commercials continue to sell contracts, potentially generating new record short positions. March soybeans made a new contract low today and both soybean meal and oil were lower as well.
• For the week, March soybeans lost 39 ¼ cents to end at 1133, March soybean meal lost $14.10 to $331.50, and March soybean oil lost 1.57 cents to 44.02 cents.
• The USDA reported an increase of only 2.1 mb of soybean export sales for 23/24, which was way below expectations and a marketing year low. There were net cancellations by China which could become a theme with Brazilian soybeans so much cheaper than the US. Year to date commitments are now 20% below that of last year. Export shipments for last week of 44.0 mb were significantly higher than the 19.1 mb needed each week to achieve the USDA’s export estimate of 1.720 bb. Primary destinations were to China, Mexico, and Indonesia.
• In Brazil, soybean basis fell today and soybeans FOB in Paranagua have reportedly fallen to 80 cents below March futures in the US. This comes amid harvest in which Brazil is over 30% completed. Estimates for total production are still within a very wide range with the lower estimates at 145 mmt and the USDA’s highest estimate at 156 mmt.

WHEAT HIGHLIGHTS:

• All three US wheat futures classes closed lower today, in tandem with Paris milling wheat. Pressure stemmed from another day of lower corn and soybean prices. Additionally, US wheat may be coming out of dormancy early, due to the recent warm weather. The Plains states have chances of moisture in the second week of the forecast but may be warmer than normal through the end of the month. However, conditions look much better when compared to a year ago at this time.
• Weekly wheat export sales were on the disappointing side. The USDA reported an increase of 8.6 mb for 23/24 and an increase of 1.7 mb for 24/25. Shipments last week were only 13.7 mb, which is behind the 17.7 mb pace needed per week to reach the USDA’s export goal of 725 mb. However, commitments at 655 mb are up 6% from last year and above the USDA’s estimated pace.
• According to FranceAgriMer, as of February 19, French wheat was rated just 69% good to very good. For reference, the crop was rated at 95% a year ago. Weather is cited as the reason for the decline. France already struggled to get the crop sown due to wet weather late in the planting season.
• Through the week ending February 17, Mississippi River barge shipments declined 8.4% from the previous week at 535k versus 584k tons. However, wheat in particular saw an 18.5% increase in shipments, at 32k versus 27k tons. Although, year on year wheat shipments are down 10.3%.
• In general, there has not been much news directly affecting wheat this week. This may indicate that the back and forth trade is technical in nature. When bulls think price has gone low enough, they start to buy, and the funds may be selling any rallies. And though wheat ended the week with a negative tone, March Chicago wheat did gain 13 cents on a weekly basis.

DAIRY HIGHLIGHTS:

• Class III rose by nearly 50 cents in April futures bringing with it the Class III average which closed higher by 19 cents at $17.89/cwt. The market responded to the bullish milk production report from yesterday which showed a decline in January production.
• Spot cheese was mixed with blocks losing a penny and a half while blocks gained a quarter. Cheese market tones are still somewhat bearish, but Midwest processors say that cheese loads are going above market pricing with many ready to take loads regardless.
• Spot butter gained 3.75 cents trading above $2.80/lb for the first time since January 30th. Powder has been rebounding since last week finishing at $1.1975/lb.
• Class IV futures followed products and Class III higher with the May contract climbing 18 cents. The 2024 Class IV average as a result gained 9 cents to close at $20.78/cwt.

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Author

John Heinberg