CORN HIGHLIGHTS:

• The corn market added weather and war premium to its value on Tuesday as prices pushed through resistance, triggering strong money flow into the corn market.
• Technically, the corn market traded through Monday’s reversal high, which likely triggered additional buying and short covering in the market.  The strong close has the corn market looking at the 100-day moving average as the next level of resistance.
• The USDA released its weekly crop ratings, and the US corn crop was rated 55% good/excellent, up 2% from last week and above market expectations. The corn crop improved, supported by recent rainfall in areas of the Corn Belt.
• Weather forecasts have turned significantly drier over the next couple weeks, and temperatures are moving to a warmer trend. Despite recent rainfall, 64% of the corn crop is in drought, and needs timely rainfall, and the warmer, drier conditions are timed with the pollination timetable, which could limit potential yield.
• Russia officially leaving the Ukrainian Grain Export deal and the attack on the Odessa port in the Ukraine added additional buying strength to the corn and wheat markets on the session.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher but slipped from their early highs which exceeded the 14-dollar mark and reached the highest levels since January of this year. The rally in soybean meal has been a major catalyst for moving soybeans higher, but soybean oil ended lower.
• Yesterday’s crop progress showed the soy crop improving more than the average trade guess with an increase of 4 points for a good to excellent rating of 55%. While an improvement, it is the second lowest rating since 2012, and only 20% of the crop is setting pods.
• Soybean meal has been rallying due to Argentina’s shrinking soy crop which is estimated at 21 mmt (4 mmt below the last USDA estimate), and Argentina is the largest exporter of soybean meal.
• With forecasts looking very dry and warm over the next two weeks, weather premium has been added to the market. Crop conditions improved over the past three weeks, but a two-week period of dry weather could easily send ratings back lower.

WHEAT HIGHLIGHTS:

• Wheat posted sharp gains, perhaps on a delayed reaction to the news of the cancellation of the Black Sea grain corridor. Additionally, some more war premium could be factored in after it was reported that Russia launched a new round of attacks on the port city of Odessa in Ukraine.
• Yesterday’s Crop Progress report showed that spring wheat condition improved 4% to 51% good to excellent. This may have limited the upside today for MPLS futures, relative to the gains in Chicago and KC.
• US winter wheat harvest at 56% complete, continues to lag behind the average pace of 69% complete for this time of year.
• UkrAgroConsult increased their estimate of Russian 23/24 wheat exports to 47 mmt (up 2 mmt). The weaker Russian Ruble may be a contributing factor. Additionally, their estimate of the 2023 Russian wheat harvest was increased by 0.4 mmt to 85.2 mmt.
• Argentina’s wheat planting area estimate has been reduced by Bolsa de Rosario to 5.4 million

DAIRY HIGHLIGHTS:

• August Class III futures closed 49 cents higher today at $15.80. The second month chart has not closed above $16.00 since June 8th.
• Spot cheese saw blocks up 9.0 cents and barrels up a nickel for a 7.0 cent gain, closing at $1.52125/lb and its highest point in 25 sessions.
• Class IV was bid lower today with the nearby contracts down double digits, although only the August contract had any volume. 
• The extent of the weakness in Class IV futures was a little surprising with spot butter closing unchanged and spot powder down 1.50 cents.
• Today’s Global Dairy Trade Auction saw the index fall to 959 points, the lowest point in nearly three years.

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

Brandon Doherty