CORN HIGHLIGHTS:

• Corn futures closed higher as today’s WASDE report provided support by lowering both U.S. and global ending stocks. September corn gained 8 cents to close at $4.39-1/2, while December futures rose 9 cents to finish at $4.61.
• Today’s WASDE report showed U.S. ending stocks falling to 1.790 billion bushels, down from 1.960 billion bushels last month. World ending stocks are seen at 275.26 mmt, which is 5.96 mt below June’s estimate.
• U.S. corn production is seen slightly higher at 16 billion bushels, up from 15.995 billion bushels in June. Yield held steady at 183 bpa.

SOYBEAN HIGHLIGHTS:

• Soybean futures closed higher following a supportive WASDE report. However, forecasts calling for favorable growing conditions could limit additional upside in the near term. August soybeans gained 14 cents to $11.91-3/4 while November gained 9-1/4 cents to $11.90-3/4. August soybean meal gained $3.00 to $320.40 and August soybean oil gained 0.54 cents to 70.46 cents. Soybean oil showed strength despite losses in crude oil.
• Today’s USDA report was friendly for grains across the board. The soybean yield was unchanged from last month at 53.0 bpa, while production was slightly increased to 4.475 billion bushels. 25.26 ending stocks were lowered by 10 mb to 330 mb, which was the most friendly part of the report. 26/27 ending stocks were unchanged at 310 mb. World ending stocks were reduced by 0.71 mmt to 124.17 mmt. Brazilian and Argentinian production were both unchanged at 180 mmt and 50 mmt respectively.
• This morning, the USDA reported a sale of 264,000 metric tons of soybeans to China for the 26/27 marketing year. Chinese purchases are encouraging, but the 25 mmt that China pledged to buy from the U.S. this year is already factored into the USDA export estimates and they would likely need to exceed 25 mmt to make a dent in the ending stocks number.
• Argentinian farmers are reportedly holding back sales of soybeans despite higher international prices. They have only sold about 40% of their 25/26 harvest, which is the slowest pace in 10 years. This is limiting key foreign currency inflows as producers hold the soybeans as a store of value.

WHEAT HIGHLIGHTS:

• Wheat made strong gains today in each class. Prior to the WASDE release, wheat was already up sharply on news that a major shipping canal near the Black Sea region may be shut down due to the war between Russia and Ukraine. It is said this could back up nearly 20 mmt of Russian wheat exports. In the September contract, Chicago climbed 20-1/2 cents to 640-1/4, Kansas City rallied 22 cents to 676-1/4, and MIAX gained 13-1/2 cents to 652-1/2.
• On today’s report, U.S. 26/27 all wheat production was lowered by 7 mb to 1.536 bb. This is the lowest figure since 1970. Winter wheat production was pegged at 990 mb, down 40 mb from last month. In the breakdown by class, HRW was down 26 mb to 471 mb, while SRW was down 13 mb at 287 mb.
• U.S. 25/26 wheat ending stocks came in at 920 mb, down from 935 mb in June, and for 26/27 they are seen at 722 mb versus 744 mb last month. Meanwhile, global wheat carryout for 25/26 fell 1 mmt to 279.0 mmt, and for 26/27 it dropped 2.6 mmt to 272.8 mmt.
• According to the USDA’s drought monitor, as of July 7, an estimated 47% of U.S. winter wheat area is experiencing drought conditions, unchanged from the week before. During the same period, spring wheat acres in drought also held steady at 19%.
• According to China’s National Bureau of Statistics, their domestic wheat production increased 0.6% year-over-year to 138.95 mmt.

DAIRY HIGHLIGHTS:

• Class III futures finished the day in the red after seeing double-digit gains early on. August futures traded as high as $17.13 before falling to close at $16.63.
• A slightly weaker cheese trade led to the weakness in Class III to end the week. Cheese fell 0.375 cents to close at $1.55375/lb. Whey improved half a cent to $0.69/lb.
• Class IV futures were steady from yesterday as the spot trade for its products were quiet. September was the only contract to see a slight bump to $18.10.
• Spot butter was unchanged at $1.65/lb while powder increased half a cent to close out the week at $1.5550/lb.

 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

Amanda Brill