CORN HIGHLIGHTS:

• Corn prices continue to consolidate around the $5.00 price level as futures were firmer to start the week. December corn traded around the $5.00 area for the sixth consecutive session are positions square before Wednesday’s USDA report.
• The USDA will release the July Supply/Demand report on Wednesday at 11:00 CST. Expectations are for corn yield to drop to 176.3 bushels/acre, down 5.2 bushels/acres from the June report. Despite the yield drop, the additional acres and possible demand adjustment will likely keep new crop corn carryover near 2.250 billion bushels on the report.
• Demand remains a concern as weekly export inspections were 341,000 mt last week, below trade expectations. This total is down 50% from last week and year-over-year, export inspections lagged last year by 32%.
• The weather forecast will limit any near-term rally and rainfall chances and over-normal temperature should help additional crop recovery in some areas and stabilize the crop into pollination.
• Improved weather across the Corn Belt has analysts looking for improvement in the corn crop. USDA crop ratings on Monday afternoon are expected to rise 2% to 53% good/excellent. Rainfall reduced the areas of corn acres in drought from 70% to 67% week over week.

SOYBEAN HIGHLIGHTS:

• Soybeans finished the day solidly on the positive side with additional support coming from both soybean meal and oil.
• Export inspections for the week ending July 6, came in at 8.754 mbu, about 900 mbu lower than last week, bringing the total for the year to 1.825 bil. bu, and 5% behind last year at this time. Although the number was within expectations, it remains well below the 22 mbu needed per week to meet the USDA’s goal.
• Friday’s COT report still shows the funds long the soybean complex, although they did reduce their soybean holdings by an estimated 10,000 contracts to 89,000. For soybean meal and oil, the funds are reportedly long 53,000 meal and 43,000 oil.
• China has adopted new regulations to require imported soybeans to be quarantined in specific warehouses prior to entering the domestic market.
• The average trade guess for 2022 ending stocks is up 5 mil bu. at 235 mbu. versus the USDA’s June estimate of 230, largely due to reduced export demand. As for 2023, due to 4 million fewer planted acres, the average trade estimate is 206 mil. bu with a 51.4 bpa compared to 49.5 last year.
• The trade estimates Brazil’s soybean production to come in at 156.2 mmt in Wednesday’s USDA report, up slightly from the June estimate of 156 mmt. For Argentina’s production, the average trade guess is 23.6 mmt, 1.4 mmt lower than in June.

WHEAT HIGHLIGHTS:

• After starting higher this morning, wheat could not hold onto those gains and traded lower for the rest of the session. Some pressure may be coming from the European markets, where Paris milling wheat futures closed lower for the third session in a row.
• Wheat export inspections of 15.4 mb bring the 23/24 total inspections to 56 mb; this is down 21% from this time a year ago.
• Funds are said to remain net short Chicago wheat by about 56,000 contracts. If Wednesday’s WASDE report is friendly, this could trigger some short covering.
• Next week the Black Sea Grain Initiative will expire – so far there has not been any new agreement reached. Turkey is reportedly trying to broker a deal to extend the corridor again, however, Russia seems adamant that they have no reason to extend the deal.
• According to the Agriculture Ministry, Russia’s wheat export tax is set to increase to 2,990 rubles per ton next week, up from 2,610 rubles.

DAIRY HIGHLIGHTS:

• August Class III futures closed at $14.89 today, up 37 cents from Friday’s close and 68 cents off Friday’s daily low.
• Spot cheese was higher for a third straight day to close at $1.4225/lb, the first close above $1.40/lb since June 26th.
• Class IV contracts were either unchanged or higher with November 2023 seeing the biggest jump at 10 cents.
• Spot butter and powder continue their move in opposite directions today with butter at a new 2023 high and powder at a new low for the year.

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Author

Brandon Doherty