CORN HIGHLIGHTS:

• Corn futures saw follow-through selling pressure as a moderating forecast and disappointing export sales report pressured prices. September corn lost 3 ½ cents to 431 ½, and December corn fell 4 ¼ cents to 452.
• Weekly export sales for corn were disappointing this week. For the week ending July 2, U.S. exporters sold 566,000 MT (22.3 mb) of old crop and 402,000MT (15.8 mb) of new crop. Both totals were below market expectations.
• On Friday, the USDA will release the July WASDE/Crop Production report. This report will give the market a look at the new balance sheet after the acre adjustments and corn supply from the June 30 Planted Acres and Grain Stocks report. Old crop corn carry out is expected to slip to 2.077 BB and new crop to slide to 1.855 BB.
• Forecast models moderated both the heat and rainfall outlook beyond early next week, prompting additional profit-taking and long liquidation as weather premium faded.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day significantly lower as weather forecasts remain favorable for crop conditions. August soybeans lost 15-1/2 cents to $11.77-3/4 while November lost 10-3/4 cents to $11.81-1/2. August soybean meal gained $5.10 to $317.40 and August soybean oil lost 0.93 cents to 69.02 cents as it followed crude oil lower. Crude oil is down $1.53 to $71.97 a barrel.
• Today’s export sales report was soft for soybeans but better than last week. The USDA reported an increase of 2.0 million bushels of export sales for 25/26 and 15.0 mb for 26/27. This was up 30% from last week but down 81% from the prior 4-week average. Top buyers were China, Japan, and Mexico. Last week’s export shipments of 21.2 mb were above the 15.2 mb needed each week to meet the USDA estimates.
• For tomorrow’s WASDE report, soybean ending stocks for 26/27 are seen 22 mb higher at 332 mb, yield is expected to be 0.5 bpa higher at 53.0 bpa, and both Argentinian and Brazilian production are expected to be slightly higher.
• Yesterday, the USDA reported sales of 472,000 metric tons of soybeans for delivery to China. This was the largest daily export amount reported to China since November last year. The country has previously committed to buying 25 mmt of soy products from the U.S. this year, and this purchase will go towards that total.

WHEAT HIGHLIGHTS:

• Wheat finished with green on the screen, rejecting the lower trade in corn, soybeans, and the energy complex. It is possible that traders are looking for friendly data on tomorrow’s WASDE report. Furthermore, MATIF wheat also closed in the positive despite a two-sided trade – this may have aided U.S. futures. In the September contract, Chicago gained 12 cents to 619-3/4, Kansas City was up 9 cents at 654-1/4, and MIAX rallied 8-1/4 cents to 639.
• The USDA reported an increase of 11.5 mb of wheat export sales for 26/27. Shipments last week only totaled 7.1 mb, which falls below the 14.5 mb pace needed per week to reach their 775 mb export goal. Total 26/27 wheat export commitments have reached 225 mb, down 21% from last year.
• The average pre-report estimate for U.S. 26/27 wheat production is pegged at 1.002 bb, which would be down slightly from the June figure of 1.030 bb. Winter wheat is expected to account for most of this decline; compared with last month, HRW wheat production is anticipated to fall 17 mb to 480 mb, with SRW down 7 mb to 293 mb
• S. 25/26 wheat carryout is expected to decline from 935 mb to 927 mb, while for 26/27 it is expected to fall from 744 mb to 710. As far as world numbers are concerned, global 25/26 ending stocks are projected to fall 0.4 mmt to 279.6 mmt, and for 26/27 they are forecasted to drop 2.2 mmt to 273.2 mmt.
• According to the Buenos Aires Grain Exchange, Argentina’s wheat planting is now 88% complete, up 7% versus the week prior. Additionally, the Rosario Grain Exchange increased their estimate of Argentina’s wheat crop production by 0.5 mmt to 20.5 mmt, due to expectations for a higher planted area. The Rosario exchange is forecasting 6.95 million hectares planted, versus the Buenos Aires Exchange holding steady at 6.5 million.
• SovEcon has adjusted their estimate of Russian 26/27 wheat exports, raising their forecast by 0.2 mmt to 46.5 mmt. For reference, they estimate total Russian grain exports at 56.1 mmt.

DAIRY HIGHLIGHTS:

• August Class III futures jumped 64 cents today to move to $16.88, a four-week high for the second month contract.
• The catalyst was a 4.50 cent jump in spot cheese which posted a $1.5575/lb settlement, aided by a 1.25 cent jump in spot whey.
• Class IV futures were also in on the fun with decent, double-digit gains for most contracts. The second month contract added 30 cents with an $18.03 close.
• While butter was unchanged today, spot powder rebounded with a nickel in gains on 35 loads traded. The selloff may have temporarily stopped.

 Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

John Heinberg