CORN HIGHLIGHTS:

• Corn futures traded slightly higher on the session, fighting off another day of selling pressure from the wheat market. May corn gained 2 ½ cents during the session while wheat futures pushed to new contract lows. The recent price action in corn has been friendly despite the overall lack of price movement.
• The corn market consolidated for the seventh consecutive day with a trading range from 420 – 430 on the May futures. Today’s session saw a narrow trading range of 6 ¼ cents from high to low as the corn market is looking for some near-term direction.
• The USDA will announce weekly export sales on tomorrow morning. The expectations for new corn sales last week are to range from 800,000 mt – 1.4 mmt for the 23/24 marketing year. Export sales last week were at 1.082 mmt for corn.
• The weekly ethanol report saw average daily production for the week ending March 1 at 1.057 million barrels. This was down 1.9% from last week, but up 4.7% from last year. Ethanol stocks rose to a new record for the week of 26.051 million barrels, pushing past last year’s old record high. Corn used during the week was 104.91 million bushels, which is trending ahead of the USDA ethanol grind targets for the marketing year.
• 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 expects to see slight changes in US carryout projections. Analysts feel US corn carryout could drop by 15 – 20 mb to 2.159 mb with slight demand adjustments for ethanol usage or a slight bump in export totals.

SOYBEAN HIGHLIGHTS:

• The soybean complex closed the day mixed with soybeans still lower from yesterday’s weakness, while soybean oil gained on meal as it garnered strength from higher palm oil. While soybeans closed lower on the day, late day strength in soybean meal lent support to the bean market enabling it to claw back most of its losses.
• As the Brazilian harvest continues, US soybean prices and export sales continue to struggle with US offers 113 cents over Brazil for April delivery, and while US soybean meal premiums aren’t as extreme, they are $22/mt over Argentina’s $372/mt.
• Analyst Dorab Mistry stated that he expects 2024 palm oil production in the world’s two largest producers, Indonesia and Malaysia, to drop by 1 million metric tons collectively, just as 23/24 world demand is expected to increase by 6 mmt with supplies increasing just 3.1 mmt. Additionally, Indonesia’s palm oil exports are anticipated to fall to 29.5 mmt from last year’s 32.2 mmt, as they are expected to increase their biofuel blending rate to 40% from 35%. This could press prices higher for the world’s most widely used veg oil and support bean oil prices.
• There continues to be a wide range of estimates for South American soybean production. This Friday the USDA will release its updated March WASDE report, and while only minor changes are expected to US carryout, the market will likely keep a close eye on where the USDA lands with its upcoming South American production forecasts, mainly Brazil. The current average estimate are for a slight increase to Argentina’s crop, and 3.2 mmt decrease to Brazil’s.

WHEAT HIGHLIGHTS:

• All three US wheat classes closed sharply lower. Rumors that China might cancel some open US wheat sales allowed the floodgates to open. Additionally, dirt cheap FOB values out of the Black Sea, around $190/mt are not helping the situation. For comparison, US wheat offers are said to be about forty to fifty dollars above that level.
• Paris milling wheat futures also closed lower today, with new contract lows being made in the May through December 2024 futures. This is despite the French wheat crop being in much poorer condition compared to last year but indicates that their exports are also struggling against competition out of the Black Sea.
• Algeria may have purchased up to 900,000 mt of milling wheat on an international tender. It is also believed that they may have done so at $38/mt cheaper than their previous tender. While the origin is unknown, there is a good chance that the Black Sea is involved. To add to the bearishness, Vladimir Putin recently stated that Russia may export 65 mmt of grain in the 23/24 season. For reference, they exported 60 mmt in 22/23.
• According to the Buenos Aires Grain Exchange, rainfall in Argentina is expected to decline as El Nino gives way to a more neutral pattern, and this may bring a drier fall for the South American nation. Wheat planting for the 24/25 season is set to begin in May, and if a La Nina pattern does develop, as some are predicting, it could once again bring drought to Argentina. For comparison, Argentina had their worst drought on record during La Nina in the 22/23 season.
• Stats Canada will release Canadian planting intention estimates on Monday. Based on farmer surveys, the average pre-report estimate of all wheat acreage comes in at 26.7 million. This is in the middle of the range of estimates, with 26.0 ma on the low end and 27.4 ma on the high side. For reference, all wheat acreage in 2023 came in at 27.03 ma.

DAIRY HIGHLIGHTS:

• A 6-month low in the US spot powder trade combined with more offering in whey kept milk futures red once again on Wednesday.
• It’s been a rough week for Class III milk, as April is down 78c, May is down 71c, and June has fallen 53c.
• Each Class III contract from April to July hit new contract lows on Wednesday.
• The butter market was the lone bright spot in the dairy trade, as the price rallied 2.25c to close up at $2.85/lb.
• US cheese was quiet with no inventory trading hands and the spot market price holding steady at $1.5575/lb.

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Author

Brandon Doherty