CORN HIGHLIGHTS:

• The corn market is still looking for direction as daily trade remains quiet with two-sided trade inside a narrow trading range. May corn moved 4 ¼ cents from high to low during the session. Prices still seem tied to the 440-price level.
• Managed funds have been moving out of their net short position in the corn market during this recent price rally. Last week’s Commitment of Traders report released on Friday showed that funds were still net short 242,988 contracts, reduced by 12,940 contracts from the previous week. Funds are still holding a historically large net short position given the current fundamental market scenario.
• Weekly corn export inspections for corn totaled 48.3 mb (1.228 mmt) last week. Total inspections for 23/24 are at 961 mb, up 34% over last year. The USDA is targeting a 26% rise in US corn exports.
• A strong weather system is moving through the western and northern Corn Belt, providing a mixture of snow and rain to areas in need. The precipitation should help build some soil moisture levels in those areas to help promote spring planting.
• The grain markets may stay choppy going into Thursday’s USDA Planting Intentions and Grain Stocks report. With the market holding short positions, additional position squaring could bring some volatility as the market moves closer to Thursday’s report.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher to start the week despite weakness in both corn and wheat. Prices were lower overnight but rallied into the close, closing just off the high of the day and just below yesterday’s high. Main support came from higher soybean oil which was helped by Malaysian palm oil, while soybean meal closed higher but not by as much.
• In Brazil, the soybean harvest is nearly complete with key growing state Mato Grosso finished and the rest of the country at 70% done. The USDA attaché in Brazil has lowered its estimates for Brazilian production in 23/24 to 152.6 mmt from 157.5 mmt. This change will likely be included in the USDA’s next WASDE report.
• Friday’s CFTC report showed funds buying back 6,798 contracts of their net short position reducing it to 148,399 contracts. Similar to corn, the short covering hasn’t had a very bullish effect on prices as farmer selling has ramped up to take advantage of any rallies.
• Last Friday, Argentina’s Buenos Aires Grain Exchange cut its estimates for the 23/24 corn crop but kept soybean production unchanged at 52.5 mmt. Argentina is the world’s largest exporter of soybean meal, so any issues in the growing season could be friendly to meal.

WHEAT HIGHLIGHTS:

• Wheat had a mostly higher close while still closing off session highs. Early support came from a lower US Dollar Index, as well as the forecast of a cold snap this week that could hit as far south as Kansas and Oklahoma. This is raising concern that there will be some damage to the HRW crop as it exits dormancy.
• Russian attacks on Odesa power plants gave wheat a boost today, with concern that port operations would be disrupted. Additionally, the second largest Russian wheat exporter was forced to keep vessels in port for not obtaining the necessary phytosanitary permits.
• Weekly wheat inspections were on the softer side at 11.6 mb and brought total 23/24 export inspections to 521 mb. That is down 15% from last year and inspections and behind the USDA’s estimated pace.
• According to a Bloomberg survey, the average pre-report estimate for wheat acreage in this week’s USDA report is 47.3 million, which compares to 49.6 ma last year. Additionally, quarterly wheat stocks are projected to be up 11.3% at 1.05 bb which compares to 941 mb last year.

DAIRY HIGHLIGHTS:

• The dairy trade started the week off on the right foot. A total of 25 loads traded in the cheese and butter market, which took cheese up 2c and butter up 5.50c.
• The spot cheese block/barrel average sits right at support, so it was encouraging to see aggressive purchasing come into the market at this important level.
• Butter has rallied back to $2.8625/lb, marking its best close so far in 2024. The market holds a pretty steady uptrend.
• Spot powder also caught a nice bid on Monday as the price came back up 1.50c to $1.1225/lb.
• This afternoon’s US Cold Storage report showed that cheese in inventory grew slightly from January, but was up 2% from a year ago.
• The USDA said February US butter storage was up 19% from January and was up 1% from a year ago.

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Author

John Heinberg