CORN HIGHLIGHTS:

• Corn futures finished lower for the third consecutive day as prices finished with marginal losses. Improved weather forecasts in Argentina and seasonal weakness pressured the corn market during the 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 as producers need to decide to price bushels or roll contracts to future months.  In addition, first notice day for March futures is on February 28, which can trigger additional volatility.
• South American weather continues to pressure corn prices. Forecasts for Argentina remain favorable, helping to stabilize the corn crop after hot and dry conditions. Models indicate the potential for widespread rainfall in key growing regions.
• Brazil’s top corn producing state of Mato Grasso, analyst have stated that improved weather has allowed planting of the second crop corn to advance to nearly 70% complete. This has corn planting back on schedule versus the 5-year average after early season delays.

SOYBEAN HIGHLIGHTS:

• Soybeans were mixed to end the day with the three front months closing higher, while the deferred months were lower. Futures came back significantly from this morning’s lows, which saw prices down as much as 10 cents. Prices then bounced off the 100-day moving average, which has been support. Soybean meal was higher, while soybean oil was lower.
• In Brazil, the 24/25 soybean harvest is reportedly 39% complete as of February 20. This compares to 23% completion a week ago and 40% at the same time last year. The soy output is now estimated at 168.2 mmt compared to 171 mmt last month.
• In Argentina, soybeans on the national level are reportedly seeing better than expected crop ratings after a period of drought that lowered crop conditions. There have been three weeks of rain following the drought that have slowed down yield losses in the country’s core growing zone.
• While the 100-day moving average has provided support over the past two months, soybean prices have been under pressure due to declining export demand. Brazilian soybeans remain cheaper than U.S. offers, and renewed tariff concerns following statements from President Trump have added uncertainty to the market.

WHEAT HIGHLIGHTS:

• Wheat closed lower across the board. The grain complex was under pressure today on talk that tariffs on Mexico and Canada will move forward next week. Furthermore, a lack of fresh friendly news and anticipation for rains in the U.S. plains brought weakness into the wheat market.
• Egypt’s supply minister reported that the country has enough soybean oil and wheat to cover five months of usage. Domestic wheat consumption stands at 750,000 metric tons per month, with total grain storage capacity at 5 million metric tons.
• SovEcon has decreased their estimate of Russian 24/25 wheat exports by 0.6 mmt to 42.2 mmt. For reference, the USDA’s estimate is still sitting at 45.5 mmt.
• As of February 23, winter wheat ratings in Texas increased by 4% vs last week to 37% good to excellent. However, conditions in Oklahoma declined by 6% from the prior rating to 34% good to excellent. Of note, the last released crop condition data for Oklahoma was on February 2.
• According to the Monitoring Agricultural Resources Unit, European Union winter crops are in mostly fair to good condition. However, January weather in northwest France was unfavorable, which could affect their wheat crop. Additionally, surrounding regions including Ukraine and northern Africa may have seen greater yield losses.

DAIRY HIGHLIGHTS:

• Class III futures continued to post losses today with March falling 31 cents to close at $18.70.
• Spot cheese fell 0.3750 cents to close out the day at $1.83625/lb. Whey was unchanged and remained at $0.5350/lb.
• Class IV futures saw losses across the board today with March down 15 cents to close at $19.03.
• Spot butter lost 2.50 cents to close at $2.3450/lb. Powder followed suit with the spot market posting losses as well and closed down 2.50 cents at $1.200/lb.

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Author

John Heinberg