CORN HIGHLIGHTS:

• Corn futures finished lower on the session, pressured by selling pressure in the wheat market as Chicago wheat prices broke to new lows in the May contract. May corn futures lost 3 ¾ cents during the session.
• The corn market consolidated for the sixth consecutive day with a trading range from 420 – 430 on the May futures. Today’s session saw a narrow trading range of six cents from high to low, and prices traded within yesterday’s trading range as the corn market is looking for some near-term direction.
• Brazil’s second crop corn planting is running well ahead of schedule, promoted by a rapid soybean harvest. Brazil consulting group AgRural estimates that 86% of the corn planting is complete versus 70% last year.
• Demand remains the focus of the US corn market. Demand news has been improved in recent weeks for US corn as export sales and inspections have trended well above last year’s disappointing total. Export sales are looking to approach the 5-year average, as the corn export window for US corn is open and prices are competitive. Both sales and shipments will need to stay consistently strong in the weeks ahead to reach USDA export targets.
• Price moves in the corn market are likely to stay choppy the remainder of the week until Friday’s USDA WASDE report. The market could see additional short covering. The report is expecting to see slight changes on US carryout projections, but the market may focus more on the USDA’s path with the Argentina and Brazil production estimates.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower and though they managed to remain off the contract lows, they have also been met with selling pressure following any rallies. Export demand has been sluggish, and the US has a greater disadvantage with the ongoing Brazilian harvest. Both soybean meal and oil ended the day lower as well.
• Friday’s WASDE report isn’t expected to include any major surprises, but analysts expect that the US soybean carryout will be slightly increased due to a decrease in exports. The world carryout is expected to fall, and estimated Argentine soybean production is expected to increase slightly to 50.3 mmt, while Brazil’s is expected to decrease to 152.8 mmt, from last month’s 156 mmt forecast.
• The Brazilian soybean harvest is now 48% complete, which compares to 40% a week earlier and 43% the previous year. Cash prices in the country have recently begun to rise, which has brought about more farmer selling, although export prices remain about 100 cents/bu. below US offers.
• In China, soybeans on the Dalian Exchange rose by 0.6% and are trading at the equivalent of $13.68. China has bought US soybeans but will likely lean more heavily on Brazil’s cheaper beans as harvest progresses. There continue to be concerns that China and other countries will cancel previous US purchases in favor of Brazil.

WHEAT HIGHLIGHTS:

• In a reversal from yesterday’s trend, all three US wheats posted losses, led by Chicago futures. This comes despite winter wheat crop good to excellent conditions declining in Texas by 3%, Kansas by 4%, and Oklahoma by 5%. Offering pressure to the wheat trade today are reports that Black Sea wheat FOB values dropped below $200 per mt, with Russia just above that level; this keeps the US uncompetitive in terms of exports.
• On Friday’s USDA report, not much change is expected for wheat in terms of the US numbers. The average pre-report estimate of US wheat carryout is pegged at 658 mb, which would be unchanged from last month. The world ending stocks estimate comes in at 259.2 mmt versus 259.4 last month. There is a chance that the USDA could lower US wheat exports from the current 725 mb.
• In Brazil, wheat imports are on the rise due to low supply from last season. According to Secex, Brazil imported about 439,000 mt of wheat up to the fourth week in February. For reference, February of last year saw just over 291,000 mt of wheat imported. In addition, Brazil’s wheat exports of roughly 131,000 mt were well below the 533,000 mt exported last year.
• According to China’s Minister of Agricultural and Rural Affairs, Chinese grain output was a record 695.4 mmt in 2023. This marks the ninth year in a row that they have recorded a harvest of over 650 mmt. As they work to become less reliant on other nations for their food security, there is also news that China has pledged to protect farmland. The government will work towards developing high quality land as well as restoring degraded land.
• The north African country of Morocco will reportedly need to increase their wheat imports. They struggled with a lack of rain in the fall and officials have stated that the wheat crop could be substantially below the 4mm crop last year. They are said to have their hands tied, in that they have no choice but to increase their imports.

DAIRY HIGHLIGHTS:

• In event 351 of the GDT auction on Tuesday, the GDT Price Index fell 2.30%, marking its first down event since November 2023.
• Within the auction, GDT butter fell 1.00%, skim milk powder was down 5.20%, and whole milk powder fell 2.80%. GDT cheddar did rise 4% to $1.94/lb, however.
• The US spot trade was pretty weak on Tuesday, with cheese falling 3c, powder down 2.75c, and whey down 1c.
• Spot whey closed down at $0.4150/lb, its lowest close since January 18th.
• Class III milk futures closed double-digits lower across the board, with April falling 33c to $16.25 and hitting new contract lows.

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Author

Amanda Brill