CORN HIGHLIGHTS:

• The corn market broke out of the most recent consolidation range with strong price action and gains on the session. May corn gained 9 ¼ cents to finish with its highest close since February 14. On the week, May corn has added 13 ¼ cents going into Friday and the March WASDE report.
• The market could see additional short covering before tomorrow’s USDA WASDE report. 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. The report will be released at 11:00 CST.
• Weekly export sales remain supportive of the corn market. The USDA announced new sales for the marketing year totaling 1.110 MMT (43.7 mb) accumulated last week. Total corn sales commitments are now at 1.544 billion bushels, up 28% from last year. Japan was the top buyer of US corn last week.
• Brazil weather will stay a focus in the corn market. With production estimates already lowered for this season due to lower planted areas, late season dry weather could limit production further, supporting corn prices. Currently, the second crop Brazil corn is being planted early and weather is supportive of good production.

SOYBEAN HIGHLIGHTS:

• Soybeans began the trading day strong out of the gate on last night’s open, and steadily climbed into the day session that was met with back-and-forth two-sided trade, with some likely short covering ahead of tomorrow’s March USDA WASDE update. May soybeans ended the day just above the 20-day moving average for the first time since mid-December. Both soybean meal and oil traded higher on the day and lent support to soybeans, with oil gaining on meal. May Board crush margins also gained on the day to close at 79-1/4 up two cents.
• The USDA released its weekly export sales for the week ending February 29, which showed stronger than expected soybean sales at 22.5 mb for the 23/24 season and 2.4 mb for 24/25. With sales of old crop beans marking a 7-week high. To date, old crop soybean sales remain behind last year’s commitments by 19% where the USDA is currently forecasting a 14% drop. Current outstanding sales to China/unknown of 116 mb are down from 149 mb this time last year.
• China’s soybean imports for the Jan-Feb time frame dropped to a 5-year low of just 13.04 mmt according to the General Administration of Customs. The drop represents an 8.8% decline from the same time last year. Poor crushing margins and delayed shipments were among the reasons given.
• Soybean prices and export sales continue to run into resistance with Brazil’s ongoing soybean harvest which has filled their export pipeline with much cheaper supplies. Brazil’s export offers have caught a bid in the last day or so and risen about 30 cents on increasing demand, though they remain about 80 cents cheaper than US offers.
• Tomorrow’s WASDE report isn’t expected to include any major surprises, but analysts expect that the US soybean carryout will see a slight increase of about 5 mb possibly by a decrease in exports. The trade will still focus on the USDA’s estimates on South American production, where the Argentine soybean crop 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.

WHEAT HIGHLIGHTS:

• Wheat closed sharply higher in the Kansas City contracts, and moderately higher in Minneapolis, but was mixed in Chicago futures. The likely culprit for the pressure was confirmation this morning (of yesterday’s rumor) that China did indeed cancel 130,000 mt of SRW wheat for 23/24. With about 49 mb of sales to China beforehand, the number is now reduced to about 44 mb on the books. This morning the USDA also reported an increase of 10.0 mb of wheat export sales for the 23/24 season, along with an increase of 2.4 mb for 24/25.
• Tomorrow’s focus by traders will be on the monthly WASDE report. The USDA is not expected to change much in terms of the wheat numbers, however. US 23/24 wheat carryout is expected to remain unchanged from last month at 658 mb, while world ending stocks are anticipated to decrease slightly, from 259.4 mmt in February to 259.1 mmt this month.
• According to StoneX, Brazil’s 24/25 wheat crop is expected to increase 14% year on year to 9.2 mmt of production. The estimate for the previous year came in at 8.1 mmt. This is also despite planting area anticipated to decrease by 11%. Therefore, the increase in the production estimate is attributable to expectations of higher yield.
• India’s wheat crop experienced heavy rain and hail last weekend in the northwest growing region. An estimated 150,000 hectares were affected by the storm, and while damage is still being assessed, this may lower the chance that they harvest a record crop. In February, it was forecast by their farm ministry that the country would collect 112 mmt. But the potential for hotter than normal weather this month may also limit this figure before harvest begins in April.
• Weather in South America remains mostly favorable for now. But according to the Rosario Grain Exchange, there is about a 77% chance that a La Nina weather pattern will develop by October. This is a concern for Argentinian farmers as this is closely associated with drought conditions for them. This would affect the growth of the wheat crop but may also affect corn and soybean plantings next season.

DAIRY HIGHLIGHTS:

• Cheddar barrels fell 8.00 cents today to $1.5450/lb while blocks were up a quarter cent at $1.4925/lb, bringing spot cheese to a 6-week low of $1.51875/lb.
• Nearby Class III futures were down moderately on the news with April dropping 9 cents. The 2024 Class III average hit a new low of $17.16.
• Class IV futures were hit with double-digit losses as sellers returned to spot butter, pushing it 8.25 cents lower to a $2.7675/lb close.
• US January Dairy Exports were supposed to be released this morning but were delayed due to technical issues.

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Author

John Heinberg