CORN HIGHLIGHTS:

• Spillover strength in the wheat market helped support December corn futures prices around the 410 area. The market has been consolidating in this area for the past 7 sessions as the market has moved into a sideways pattern, with corn prices looking for a signal for the next price move.
• With improved margins, weekly ethanol production trended higher last week. Average production last week was 1.106 million barrels/day. This was up 4.9% from last week and up 3.4% from last year and set a new daily high for ethanol production for this week of the calendar year. The amount of corn used for the week is estimated at 109.78 million bushels, which is slightly below the pace to reach the new USDA ethanol usage targets for the marketing year.
• The USDA will release the weekly export sales report on Thursday morning. Expectations are for new sales to range from 500,000 – 800,000 mt for the old crop and up to 400,000 mt for the new crop.  With just over a month left in the marketing year, the market will be starting to focus more on new crop sales, which have been lackluster.
• Weather concerns other than extremes are likely past the point of impacting the corn crop nationally. Going into the end of the month, the forecast remains very favorable for corn production.

SOYBEAN HIGHLIGHTS:

• The soybean market closed the session in mixed fashion with the August and September contracts settling higher on the day, with the deferred contracts lower. August beans gained support as CBOT deliverable receipts showed net cancellations for all three legs of the complex, indicating firm demand in the cash market.
• Just before the morning break, August beans rallied to close the gap left behind from Sunday evening’s lower opening from Friday’s close. Once filled, August soybeans retreated in choppy trade as new crop contracts led the way lower, with weakness coming from sharply lower soybean oil. Soybean meal, on the other hand, rebounded and settled in the green near the day’s highs.
• It’s been reported that China bought upwards of 4.5 million metric tons of Brazilian soybeans, primarily for August delivery, since the beginning of July, taking advantage of the recent drop in prices and the recent drop in the Brazilian real, which makes Brazil’s soybeans more competitive on the export market compared to US offers.
• The recent buying activity by China from Brazil highlights the thin book of sales that the US currently has for the new crop. More recently, there have been rumors that China may have bought 6 or 7 cargoes of US beans off the PNW for late summer delivery since the Brazilian real has rebounded and stabilized, allowing US offers to be more competitive.

WHEAT HIGHLIGHTS:

• Though closing below session highs, wheat was the upside leader today in the grain complex. The US Dollar Index offered support as it dropped sharply today, hitting the lowest level since late March. This may be tied to the belief that the Federal Reserve will issue a rate cut in September. Additionally, US wheat futures are very oversold and could be due for more of an upside correction.
• The chart gap above the market has yet to be filled for Paris milling wheat futures, despite a higher close for those contracts today. Along with being technically oversold, this may lend credence to the idea that wheat has some potential to rally, as gaps tend to be filled over time.
• Russia supplied the majority of the wheat in Egypt’s largest tender in two years. Of the 770,000 mt total, Russia fulfilled 720,000, while Bulgaria got the rest of the business for 50,000 mt. Russia continues to dominate the export market despite some of the issues their crop faced. Currently, their spring wheat crop may be impacted by heat and dryness.
• According to their agriculture ministry, the export duty on Russian wheat increased 4.7% from 1,701.3 to 1,780.5 Rubles per mt as of July 17. These duties are said to be valid until July 23, and only apply to wheat; duties on barley and corn will remain at zero.

DAIRY HIGHLIGHTS:

• The August Class III second month contract held small gains today, finishing up 3 cents at $19.77.
• Spot cheese had a green day for the second day in a row with an impressive 15 loads traded, closing up 1 cent at $1.88625/lb. Blocks closed down 0.50 cents at $1.8600/lb and barrels closed up 2.5 cents at $1.9125/lb.
• Spot butter closed down 0.75 cents at $3.1300/lb and powder lost 0.50 cents to close at $1.1650/lb.
• Class IV milk had a down day with the next 11 contracts down in the red at today’s close. The August contract gave back 7 cents.

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Author

Brandon Doherty