- Corn futures finished the day mostly higher as prices tried to find a near term bottom after last week’s disappointing end to the week. Corn futures were supported by overall weekend rainfall not hitting all key areas of the Corn Belt and the expectations of crop ratings slipping again this week.
- The USDA will release weekly corn crop ratings on Monday afternoon. Expectations are for an additional drop to 52% good/excellent, down 3% from last week. The state of Illinois will stay as a focus of the market as rainfall missed many areas of the state and ratings were at 36% good/excellent last week, down 29% from the 5-year average.
- Weekly corn export inspections were disappointing at 543,000 MT, and below market expectations. Year to date, corn inspections are still running 32% under last year’s pace.
- Weather models in the longer term are trying to build a wetter forecast, which could limit market gains if realized. The key to all forecasts will be the coverage and location of rainfall.
- The market may likely remain choppy as traders look to this Friday’s USDA Planted Acreage and Grain Stocks report.
- Soybeans closed higher today along with both soybean meal and oil after rainfall this weekend missed crucial dry regions including southern Illinois, and tensions within Russia grew which could affect veg oil exports.
- Crop progress will be released shortly, and expectations are that good to excellent ratings will fall by another 3 to 4%, but the weekend rains may have helped limit the decline. Last week, Illinois’ rating fell by 14% to just 33% good to excellent.
- Soybean oil was supportive for soybeans as palm oil rallied 2.65% today along with other veg oils. Palm oil supplies may end up being tight due to weather issues, and exports from other countries may be limited.
- Soybean export inspections were poor for last week and could be a wet blanket over the market even with dry weather in the US. Inspections totaled 5.2 mb for 22/23 and put total inspections at 1.807 bb which is down 4% from the previous year.
- News of a mutiny by a private Russian fighting group, the Wagner Group, against the Russian government may be tied to early strength in the wheat market. However, it is believed that some sort of deal was reached, because the group was no longer headed to Moscow, but instead back to Ukraine. This could explain why wheat faded into the close.
- Weekly wheat inspections at 7.5 mb bring the total 23/24 inspections to 28 mb. This total is down 43% from this time last year.
- Managed funds are still said to be net short about 84,000 contracts of Chicago wheat as of last Tuesday. This could lead to more of a short covering rally if there is a catalyst in the form of friendly news.
- Russia will reportedly reduce their wheat export tax from 2,613 rubles per ton to 2,473, equivalent to roughly $31 vs $29 per ton. While not a huge move, the fact that they continue to dominate on the export front with low prices does not bode well for US exports and prices.
- Paris milling wheat futures gapped higher on the open, likely due to the uncertainty of the Russia news. However, they finished with losses and closed the gap, offering no support to the US markets.
- July Class III futures brought the second month chart to its lowest point since May 2020, closing down 49 cents at $14.86.
- Cheese also hit its lowest point since COVID by dropping 4.6250 cents to 1.40625/lb. Barrels closed at an 8.75 cent premium today.
- Spot butter and powder both dropped to start the week, but remain in their long-term ranges.
- Class IV reacted with losses in August through November today, while the second month contract was unchanged at $18.00.
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