CORN HIGHLIGHTS:

• Moderately strong selling pressure pushed corn prices lower for the second consecutive session as technical selling triggered long liquidation in the corn market. The weak close technically on Monday will likely leave room for additional selling pressure going into tomorrow’s session.
• The last week of February is historically a period of weakness in the corn market. This week is typically a pricing period for March basis contracts, and first notice day for March futures, which can trigger selling pressure.
• The USDA released weekly export inspections on Monday morning. For the week ending Feb 20, U.S. exports shipped 1.134 MMT (44.7 mb). This total was toward the lower end of expectations and down approximately 500,000 MT from last week’s total. Regardless, corn export shipments are still ahead of the USDA target and up 32% YOY.
• Strong corn demand has been a supportive factor, with export sales and shipments maintaining strength. However, the USDA has not announced a reported corn export sale since February 14, during a period when demand is expected to stay active. If the market perceives a slowdown in demand, prices could be vulnerable to correction.
• South America weather has added to the selling pressure on corn prices. Argentina weather forecast remain improved, helping to support and stabilize the corn crop after periods of hot and dry weather. Brazil weather has turned more favorable for planting of the key second crop Brazil corn.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower along with the rest of the grain complex in a very risk-off trading session. Pressure continues to come from the ongoing Brazilian harvest and slowing US export sales in favor of cheaper Brazilian beans. Both soybean meal and oil were lower, but bean oil led the way down.
• Today’s export inspections report was within trade estimates at 31.6 million bushels and was also slightly higher than last week. Total inspections in 24/25 are now at 1.355 bb which is up 11% from the previous year. Export sales have slowed noticeably in the past few months with cheaper Brazilian soybeans.
• In Argentina, soybeans on the national level are reportedly seeing better than expected after a period of drought that lowered crop conditions. There have been 3 weeks of rains following the drought that have slowed down yield losses in the country’s core growing zone.
• Friday’s CFTC report saw funds as sellers of soybeans by 11,949 contracts leaving them net long 16,526 contracts. They were buyers of soybean oil by 6,912 contracts leaving them long 53,472 contracts but sellers of soybean meal by 9,761 contracts which increased their net short position to 22,090 contracts.

WHEAT HIGHLIGHTS:

• Wheat posted double digit losses in each of the three classes, leading the grain complex lower. Early weakness stemmed from Matif wheat futures which gapped lower on their open; front month March managed to close the gap, but a small one remains present for the May contract. Also, the fact that much of the central US is wet and warming up should be favorable for winter wheat as it leaves dormancy, eroding any weather premium still in the market.
• Weekly wheat inspections totaled 13.8 million bushels, bringing the 2024/25 total to 559 million bushels, up 21% from last year. Inspections remain slightly ahead of the USDA’s estimated pace, with the agency projecting total 2024/25 exports at 850 million bushels, a 20% increase from the prior year.
• Weekend temperatures in Russia were not cold enough to stress the wheat crop, and upcoming rains are expected. These factors pressured the global wheat market today.
• On a bullish note, IKAR has said that Russia’s wheat export values ended last week at $251/mt, which is up $4 from the week before. Nevertheless, their wheat exports last week were steady, compared with the prior week at 420,000 mt, according to SovEcon.
• According to Friday’s CFTC data, managed funds bought back 32,500 wheat contracts combined, among all three futures classes. This brings their net short position to 91,510 contracts, which is the smallest in three months. The Chicago contract accounts for the majority of this short position; it was reduced by about 21,000 contracts to 61,500 contracts.

DAIRY HIGHLIGHTS:

• Class III futures were down across the board beyond February futures. Losses were small, ranging from 2 to 7 cents.
• Spot cheese fell a penny today to $1.84/lb. Blocks sit 8 cents above barrels. Spot whey also lost a penny to move to $0.5350/lb.
• Class IV futures also closed in the red with the second month March contract down 11 cents to $19.07.
• Spot butter fell 4.50 cents today, giving back the 3.75 cents it gained last week and more. Spot powder continued its downtrend, falling 1.50 cents.
• Fluid milk consumption was 42.98 billion lbs in 2024, up 0.6%  from 2023 and the first YoY increase since 2009.

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Author

Brandon Doherty