CORN HIGHLIGHTS:

• Friday saw selling pressure in the corn market, as the market moved past the hot weather and focused on a more friendly overall forecast. Price broke through key support levels, closing below the 40, 50, and 100-day moving averages on the day. December corn traded 6 cents lower on the week, but a disappointing 40 cents off the week’s high of $5.72-¼.
• Friday morning started with rain on the radar, which saw moderately good coverage from western Illinois through the Ohio River valley. Additional forecasts are looking for more precipitation to build on Friday night into Saturday.
• Argentina saw good producer movement in their latest “Pesos for Maize” program, providing incentive for producers to sell grain. The three-day program netted nearly 100 mb of sales for the export market. US corn exports still struggle to be competitive versus cheaper Brazil and competitive Argentina corn prices.
• The wheat market saw additional long liquidation as prices have fallen off the most recent highs and global wheat prices are keeping US wheat at a competitive disadvantage. The weakness in wheat spilled over into the corn market.
• Weekend weather will be closely watched. With the weak price action on Friday, a wet forecast will likely bring additional selling pressure to start the week.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower with front month August posting significant losses, while deferred months were down, but not by as much. Soybean meal ended lower by over 2%, but soybean oil was bear spread with the two front months closing lower, while deferred months were higher. Some of the extreme price action in the August contracts could be because they will be entering the delivery phase with the first notice day for delivery on long position holders being Monday, July 31.
• Today, pressure came from overnight scattered showers in the Midwest and more favorable forecasts for August with more rain and more forgiving temperatures. August will be a critical time for soybean yields and weather will be a large focus for many traders.
• Soybeans have gotten some friendly news this week with three flash sales to unknown destinations, but prices were unable to hold. With current 23/24 sales 60% behind last year’s pace, it is possible that Nov soybeans met with resistance after coming very close to the contract highs and spurred selling.
• While Brazil is dominating global exports, the US will become more competitive in October, which could explain the recent sales for 23/24. Even with poor exports, domestic demand has been firm with profitable crush margins.

WHEAT HIGHLIGHTS:

• Wheat traded both sides of unchanged but struggled to hold onto any gains. All three US futures classes closed lower, alongside Paris milling wheat futures, which were lower for the fourth session in a row.
• The spring wheat crop tour in North Dakota came up with a final yield of 47.4 bpa. This compares with the USDA’s projected yield of 47, last year’s yield of 49.1, and the average of 40 bpa.
• The Buenos Aires Grain Exchange kept their 23/24 wheat crop planted area unchanged at 6.0 million hectares.
• There is some concern starting to develop about the wheat crop in the dry areas of Australia. In Canada, the spring wheat crop could be affected by dry conditions, and here in the US, 43% of spring wheat and 47% of winter wheat are said to be experiencing drought.
• The US Dollar Index continues to trend higher after bottoming in mid-July. This is keeping pressure on the export market, and thus, futures.

DAIRY HIGHLIGHTS:

• The spot cheese trade stalled mid-week but was higher on the week overall, the block/barrel average up over 11 cents per pound on the week.
• Cold storage from earlier in the week showed strong growth in butter inventories and overall cheese inventories lower than last year.
• Regional cheese reports offer bullish support of prices stating milk availability tightening with strong demand for cheese.
• Dairy cow culling continues at strong rates YoY, with the week ending 7/15 up 7.5% from last year.

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Author

John Heinberg