CORN HIGHLIGHTS:

• After a very quiet USDA March report, buying strength in wheat and soybean markets helped lift corn futures higher to end the week. May corn gained 1 ¾ cents on the session, posting its highest close since February 14. For the week, May corn futures gained 15 cents.
• Additional fund short cover helped trigger the rally in corn futures this week. Last week on the Commitment of Trader’s Report, funds exited over 45,000 short contracts, and that path was likely again this week.
• On the March USDA WASDE report, the USDA left the US corn balance sheet unchanged from February. The only changes were to the Argentina corn crop, raised by 1 mmt to 56 mmt, and an overall reduction in the world ending stocks to 319.63 mmt, lower than market expectations.
• Corn charts have improved technically, and with follow through buying on the weekly chart, may help bring additional buying strength next week. May is challenging a key resistance point at 440 on the charts.
• 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, Brazil’s second (safrinha) crop corn is being planted early and weather is supportive of good production.

SOYBEAN HIGHLIGHTS:

• The soybeans began the day on the negative side of unchanged but reversed course along with soybean meal on the release of the USDA WASDE report. May soybeans rallied into the close to post its second consecutive close above the 20-day moving average with a 33 ½ cent gain on the week. Soybean meal closed $7.0 higher on the day, while bean oil also clawed its way of the low, but still closed 0.18 cents lower on the day, with weakness from the energy sector.
• Today the USDA released its updated WASDE report for March, and it made no changes to US soybean ending stocks. When looking at South America, they did reduce Brazil’s soybean production by only 1 mmt, where a 4 mmt drop was expected, to 155 mmt and left Argentina’s production unchanged at 50 mmt, where a minor 0.3 mmt increase was expected. The overall lack of significant changes by the USDA and the market closing higher, could indicate that a near-term low is in place.
• Argentina’s soybean crop conditions grew from 82% “normal to excellent” to 83% for the week ending March 4th. The Buenos Aires Grain Exchange cited recent rainfall in the northern areas of the country for the gain.
• Brazil’s Trade Ministry published updated export information for the month of February that showed soybean exports for the month were up 27% from last year, with total shipments to China showing a 42.2% increase.

WHEAT HIGHLIGHTS:

• Today’s USDA report was the focus of traders’ attention but there was not much to write home about. In general, the report was very neutral. As for wheat specifically, US ending stocks were raised to 673 mb from 658 mb in February. The world carryout was revised slightly lower to 258.8 mmt, compared to 259.4 mmt previously. The USDA did also cut US exports from 725 to 710 mb for the 23/24 season. Production estimates for Australia and Russia were both increased by 0.5 mmt apiece. Despite the relatively impartial data, wheat ended with decent session gains, potentially indicating that the market has found a bottom for the time being.
• This morning another confirmed cancellation of US SRW wheat to China was announced. This time 110,000 mt were taken off the books. Interestingly the market didn’t seem to pay much attention to this news, possibly meaning that it was already baked into the market after the cancellation rumors and sharply lower trade on Wednesday.
• Adding some support to the wheat market is the recent drop in the US Dollar Index. Having started the week around the 104.00 level, the past few sessions have seen it decline to a low around 102.35 today. This afternoon it is trending back towards neutral, but since it usually shares an inverse relationship with wheat prices, a continued fall may lead to some bullish sentiment for wheat.
• Argentina announced plans to construct a new port near the Rosario area on the Parana River. Reportedly, the government will invest about $550 million into the project. The region where it will be built is already a major ag center and accounts for over 80% of their ag exports; construction is set to begin this month. Argentina is a major exporter of soybean oil & meal, along with corn, and wheat.
• According to FranceAgriMer, the French soft wheat crop was rated 68% good to very good as of March 4. This is unchanged from last week but is well below the 95% rating at the same time last year. In addition, Paris milling wheat futures closed higher today and appear to have also put in a near-term bottom. This may have also lent some support to the US market today.
• According to the UN’s Food and Agriculture Organization, global ’24 wheat production is expected to increase 1% year on year to 797 mmt. If true, this would still be below the record high in 2022. The FAO says that the US wheat crop could top 51.5 mmt, beating last year. However, production in the EU may fall slightly to 133 mmt due to the heavy rain and snow that affected planting in France and parts of Germany.

DAIRY HIGHLIGHTS:

• Spot cheese was weaker again today with barrels losing 5.75 cents and blocks dropping 3.25 cents. Spot cheese posted a double-digit loss going home at $1.47375/lb.
• Despite cheese seeing heavy selling for the second straight day, Class III milk was able to gain back some losses from the previous session. The April futures contract gained 17 cents on the day followed by May which saw a 10-cent increase. The 2024 Class III average now sits at its lowest level since January 2023 at $17.20/cwt.
• Spot butter was able to recoup some of its losses from the previous day gaining 3.50 cents to close at $2.8025/lb. Powder was also able to improve 2.25 cents at $1.17/lb.
• Class IV futures were little moved on the day but were still able to see some gains. Butter and powder supported improvements in the April, May, and September futures contracts. The 2024 Class IV average sits at $20.28/cwt.

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Author

Brandon Doherty