CORN HIGHLIGHTS:

• The corn market likely saw some profit taking following the recent runup and yesterday’s choppy price action since there was little fresh news to help the bull camp push prices higher. Additionally, pressure from a sharply lower wheat market spilled over into the corn market and helped lead prices lower.
• Ethanol production for the week ending July 21 in today’s EIA report was friendly at 1.094 mil barrels/day, 36k b/d above expectations, and exceeded the 2018 record of 1.074 mil b/d. Corn used for ethanol production reached 110 mb, which is above the pace needed to reach the USDA’s forecast. Despite the strong production numbers, ethanol stocks were steady at 23.2 mil. barrels, suggesting strong gasoline demand.
• The lack of any reports of new attacks on Ukrainian grain facilities along the Danube River likely contributed to the selling in the corn and wheat markets as participants took out some near-term risk premium. Also in response to the recent attacks on the Danube River facilities, the EU has also pledged to help Ukraine export almost all its grain via road and rail connections through bordering countries.
• According to Britain’s UN ambassador Barbara Woodward, Russia may have laid new mines in the waters near Ukrainian ports in the Black Sea, and that the Russian military may target civilian ships in the area.
• Parts of Minnesota, Wisconsin, and northern Illinois received between 1.5” – 3” of rain over the last 24 hours. Michigan and Wisconsin again are expected to receive decent amounts over the next few days, while much less is expected for the rest of the Midwest, with hot temperatures expected in the western Corn Belt.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day mixed with August and September posting significant gains, while the deferred contracts ended relatively unchanged. Soybean meal supported soybeans today with a higher close, while soybean oil ended lower. While August Board Crush was down 32 cents, closing at 249 cents/bu today, soybean crush incentives have also been very high, adding to the support of nearby soybeans.
• Soybeans also received support from news on the export wire with two soybean sales reported today. The first sale was for 272,000 metric tons sold to unknown destinations for 23/24 and the second sale was for 229,000 metric tons again to unknown destinations for the 23/24 marketing year. The purchaser could have been China stocking up on supplies.
• Soybean oil was dragged lower by another poor close in palm oil futures, but soybean meal closed higher for the ninth time in the past ten trading days on good export sales and new crop sales that are reportedly 32% higher than a year ago.
• Weather forecasts are hot and dry into Saturday for most of the Midwest, but some northern states have been receiving rain, and the 2-week forecast is showing precipitation levels closer to normal. Private yield scouts are estimating yields between 50.5 bpa and 51 bpa, below the USDA’s estimate of 52.0 bpa.

WHEAT HIGHLIGHTS:

• Wheat closed sharply lower in all three US futures classes. Ealy weakness may have stemmed from anticipation that the Fed would issue another interest rate increase today. This afternoon it was announced that they did in fact raise rates to help tame inflation, but this also renewed recession fears by leaving the door open for another rate hike.
• The first day of the spring wheat crop tour in North Dakota resulted in a yield estimate of 48 bushels per acre. While the average is around 40 bpa and last year’s yield was 48.9 bpa.
• Putin met with African leaders to discuss grain exports to their nations. Meanwhile, Ukraine continues to ask the EU for alternative methods of exporting their grain. So far, there have been no additional headlines of Russian attacks on Ukrainian ports or grain facilities.
• Russia remains the world’s cheapest source of wheat and is reportedly $50 per ton below that of Baltic or European offers.
• According to the International Monetary Fund, Russia’s withdrawal from the Black Sea grain deal could result in grain prices increasing by 10-15%.

DAIRY HIGHLIGHTS:

• The US spot butter market was bid 6c higher on Wednesday and posted its highest close since 12/16/2022.
• The bidding in butter helped to push nearby Class IV futures double-digits higher. August added 15c to $18.91 while September added 31c to $19.20.
• The Class III market was on the defensive once again from profit taking and possible farmer selling as the cheese market took a pause for the second day in a row.
• Spot cheese is still up 10.25c this week, but was unchanged yesterday and lost 2.50c today. The market may want to see more bidding before pushing Class III futures any higher.
• The last trading day for July dairy futures will be August 1st.

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Author

Brandon Doherty