CORN HIGHLIGHTS: 

• China cancelled another previous purchase of 233,000 tons, the second this week.
• Export sales at 15.7 mb were disappointing. Year-to-date sales are 1.513 billion bushels, well below last year’s 2.264 bb and at a weekly pace that would suggest the USDA will likely lower the total sales forecast of 1.850 bb. Today’s figure was 49% below the prior 4-week average.
• Corn futures contracts finished lower in 6 of the previous 7 sessions. Fund selling and triggered sell stops were features in today’s trade. Double digit losses in wheat and soybeans may have also added pressure.
• A long-standing chart gap on July futures from July 25, 2022, was filled this morning at 5.95-1/2. The market remains oversold by many technical indicators.
• A cool but direr forecast for most of the Midwest will allow planting to stay on or ahead of the 5-year average pace.

SOYBEAN HIGHLIGHTS:

• Soybeans closed lower for the seventh consecutive day, November soybeans have lost 29-¾ cents on the week, under pressure from falling soybean and oil prices as well as Brazil’s nearly complete harvest.
• The funds were heavy sellers of corn, beans, and wheat today, and the Chinese sale cancellation in corn was most likely the catalyst.
• Weekly soybean export sales were decent for this time of year at 11.4 mb for 22/23 which was up 38% from the prior 4-week average. Shipments were 16.7 mb and were above the 13.2 mb needed each week to meet USDA estimates.
• With Brazil taking over the number one spot for soybean production, they are also expanding their crushing capabilities. Cargill will be expanding their soybean processing, biofuel output, and storage and export capacity in Brazil.
• As of last Friday’s CFTC, report, non-commercials held a net long position of over 100,000 contracts, but that number will very likely fall sharply as of tomorrow’s report.

WHEAT HIGHLIGHTS:

• Moisture in the southern Plains states and spillover pressure from lower soybean and corn markets offered no support to wheat today.
• Stats Canada estimated all wheat acres higher than expected. However, this survey was taken in December, prior to the cold and wet pattern and the steep drop in prices. This could mean that farmers may end up planting less wheat and more oilseeds.

• The USDA reported an increase of 5.7 mb of wheat export sales for 22/23 for a total commitment to date of 686.78 mb, and an increase of 7.4 mb for 23/24 for a total commitment of 37.2 mb.

• Funds are said to be adding to short positions in wheat, and money flow may be moving out of commodities in general, on fears of lower demand and possible recession.
• Inspections of shipping of vessels in the Black Sea is said to have slowed to a crawl, and Russia is asking vessel owners to sign a letter with the understanding that the export deal will end on May 18^th.
• Despite yesterday’s firmer close, Paris milling wheat futures saw a significant drop. Their December contract led the way down with a decline of 6.25 Euros per metric ton to 240.50.

DAIRY HIGHLIGHTS: 

• After falling 46.50 cents in the last 22 trading days, the block/barrel average closed up 6.875 cents today at $1.6350/lb.
• While the market has a way to go in terms of recovery, this action brought buyers into Class III futures which saw double digit gains in the May and June contracts.
• Spot butter closed green and is threatening to break above the top end of its multi-month range; a breach of $2.4575/lb opens up the topside.
• The half cent break in spot powder kept Class IV futures mostly unchanged as that market remains quiet.
• Without some better demand news, the dairy complex will continue to struggle with consistent milk and dairy product production.

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Author

Bryan Doherty