CORN HIGHLIGHTS:

• Corn closed with double digit losses across the board, alongside sharply lower soybeans and wheat. It appears that funds are continuing to add to short positions; as of Friday’s Commitment of Traders report they held a net short of 354,000 corn contracts, the largest since 2019. Looking at the silver lining though, so far December corn has not broken through support at 400.
• The corn market continues to see a tale of two crops. Parts of the eastern corn belt look very good and have rain in the forecast over the next seven days. But in the northwestern corn belt where there has been so much flood damage, shallow roots may be an issue as that region is expected to start becoming warmer and drier.
• Weekly corn inspections at 42.5 mb were in line with expectations and bring total 23/24 inspections to 1.756 bb. That is up 31% year on year and inspections are running ahead of the USDA’s projected pace; total corn exports are projected at 2.150 bb.
• According to AgRural, Brazil’s safrinha corn crop harvest is 74% complete in the central and southern regions, and according to CONAB, this crop is about 61% harvested in total, with the first corn crop at 95% complete. This harvest pressure is also said to be affecting corn prices in Brazil, causing them to drop. Furthermore, CONAB raised their estimate of the safrinha crop production to 90 mmt from 88.11 mmt in June.

SOYBEAN HIGHLIGHTS:

• The soybean market gapped lower across the board at the onset of trading Sunday night and never looked back. Soft weekly export and NOPA crush data added to the negativity in the soybean complex, and while Friday’s WASDE report was neutral to friendly relative to expectations, it still showcased a growing supply picture, which continues to weigh on the market.
• Soybean meal and oil also traded lower in sympathy with soybeans as Board Crush margins gained 13 ½ cents in the August contracts and 5 cents in the December from today’s weakness.
• Today’s NOPA crush report showed June crush below expectations at 175.6 mb. Though within the range of expectations, the trade was looking for a number closer to 178 mb. Soybean oil stocks also came in at 1.622 billion pounds, below expectations of 1.669 bil. lbs. Initial reactions rallied nearby, old crop oil contracts, though new crop contracts remain weak.
• Weekly soybean export inspections were below expectations with only 6 mb inspected for export, a marketing year low. They were also behind the pace needed to reach the USDA’s forecast. Year to date inspections remain 16% below last year while the USDA projects a 15% decline.
• Friday the Commitment of Traders report was issued, showing that as of Tuesday, July 9 managed funds increased their net short soybean position by 31,679 contracts. This brought their total net short soybean position to 172,605 contracts. Since that time have likely added to that position, with it currently being an estimated net short totaling 183,000 contracts.
• Friday’s WASDE report was favorable for corn but neutral for soybeans. Old crop ending stocks came in at 345 million bushels, 5 mb below last month and towards the lower end of expectations. US production for 24/25 was slightly lowered from last month’s estimate to 4.435 bb, and slightly below trade expectations. Yields remained unchanged at 52.0 bpa, while new crop ending stocks were pegged at 435 mb, relatively in line with expectations.
• The soybean market may be experiencing some geopolitical pressure as well, as many believe the assassination attempt on former President Trump could have greatly increased the odds of his re-election, potentially bringing with it more strained trade relations with the world’s largest soybean importer, China.

WHEAT HIGHLIGHTS:

• Wheat closed sharply lower in all three US categories. Weakness stemmed from mostly bearish data on Friday’s WASDE report. Though exports and demand were raised, this was offset by higher carryout numbers, as well as higher production estimates for both spring and winter wheat. To add to the negativity, Matif wheat futures gapped lower today, and also closed near session lows.
• Weekly wheat inspections at 19.6 mb were above expectations and bring total 24/25 inspections to 83 mb. This is up 26% from last year and inspections are running far ahead of the USDA’s projected pace; total 24/25 exports are estimated at 825 mb, a 25 mb increase on last Friday’s report.
• IKAR has reportedly increased their estimate of the Russian wheat crop by 1.2 mmt to 83.2 mmt, aligning with the USDA’s estimate. This, combined with falling export values, is bearish for the market. Russian wheat exports have reportedly decreased to $218 per mt FOB. Additionally, SovEcon reported that Russia exported 600,000 mt of grain last week, with 510,000 mt of that being wheat.
• Flour millers in Pakistan have reportedly gone on strike to protest new taxes. Consequently, the Pakistani government has halted all exports of flour made from imported wheat and stopped all wheat imports, according to their commerce ministry. Pakistan’s wheat harvest is expected to be 5.4% higher than last year but still 2.3 mmt below the targeted 32 mmt.

DAIRY HIGHLIGHTS:

• Class III milk futures were mixed with front month contracts trading in the green while further out contracts traded lower. The 2024 Class III average was still able to gain 2 cents to close at $18.41/cwt.
• Spot cheese dropped for the third session in a row to $1.86250/lb. Spot Whey also fell a penny to go home at $0.50/lb.
• Class IV milk futures had an uneventful day with light volume trading. The December contract was the only contract to see any volume making a 10-cent gain to close at $21.10/cwt.
• Spot butter traded 2.25 cents higher to $3.1225/lb with 24 loads traded. Powder lost half a cent to last trade at $1.1750/lb.

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Author

Brandon Doherty