CORN HIGHLIGHTS:

• An overall quiet session in the corn market as market participants squared positions and prices consolidated prior to Friday’s USDA Crop Production and Supply/Demand reports. December futures had an 8-cent trading range, finishing with small gains on the session.
• Friday’s USDA report will be anticipating potential yield changes with this summer’s overall dry weather. Expectations are for yield to be lowered to 175.5 bushels/acre, which reduce carryout to 2.162 billion bushels. The USDA could make some demand adjustments, as demand has been lacking.
• Weekly export sales were improved for new crop corn sales at 29.9 mb, and old crop at 5.9 mb. Mexico was the largest buyer of US corn last week. Though sales improved, new crop sales are still trending below last year’s pace at this time frame on soft demand tone.
• Brazil’s CONAB raised their forecast for Brazil corn production to 129.96 MMT vs 127.77 MMT. This is an increase of 86.2 million bushels. Corn exports were targeted at 50 MMT.
• The weather forecast remains non-threatening going into the second half of August with temperature forecasted to stay near normal with rainfall to be normal to above-normal for much of the Corn Belt.

SOYBEAN HIGHLIGHTS:

• Soybeans began the day higher but declined and ended mixed with the two front months lower but the deferred contracts higher. Soybean oil was also bear spread but soybean meal was higher. Trade has been relatively quiet ahead of tomorrow’s WASDE report.
• Expectations for tomorrow’s USDA report are for the national soybean yield to fall to 51.2 bpa from 52.0 bpa in the last report, and new crop ending stocks to fall to 261 mb from 300 mb in the last report. The USDA’s yield estimates may end up incorrect, especially after the recent and forecasted rains.
• Malaysian palm oil futures were down 1.17% today, and palm oil is now cheaper than both soybean and sunflower oil by $100 to $150 per metric ton which has incentivized India to import 60% more palm oil in July than in the previous month.
• The US has become more competitive with Brazil for soybean exports in the fall, and the recent string of Chinese purchases from the US has been encouraging. Yesterday, another sale was announced for the 23/24 marketing year of 9.2 mb.

WHEAT HIGHLIGHTS:

• The USDA reported an increase of 20.9 mb of wheat export sales for 23/24, a marketing year high, but a decrease of 0.2 mb for 24/25.
• Matif wheat closed lower, despite consultancy Strategie Grains lowering their EU soft wheat production estimate to 124.7 mmt (vs 126.2 mmt previously) due to heat and dryness this growing season.
• India’s domestic wheat prices are on the rise, so they will reportedly release 5 mmt of wheat from their reserves to help combat these higher prices. It is also possible that in tomorrow’s report, the USDA will lower wheat production in India (and China) due to the weather problems they have experienced.
• Pre-report estimates suggest US 23/24 all wheat production at 1.740 bb, up just slightly from 1.739 in July. US wheat ending stocks are anticipated to come in at 579 mb (vs 580 last month) for 22/23 and 594 mb (vs 592 last month) for 23/24.
• Ukraine’s Navy has designated temporary corridors for trade ships to pass through, despite the risks of a Russian attack. The question is, will there be vessels (and crews) willing to take on that risk? In any case, these routes will allow for movement in and out of Ukrainian ports.

DAIRY HIGHLIGHTS:

• Spot cheese was slightly higher today to close at $1.8850/lb, but Class III futures fell under pressure. 
• Nearby months were down 20 to 30 cents with the second month September contract finishing at $17.61. The contract has amassed a $1.17 cwt range so far this month.
• Class IV action was unchanged to lower on very light volume. September was unchanged, while October dropped 20 cents on a single trade.
• The spot trade for Class IV products was mixed with spot butter up 2.50 cents and spot powder dropping 2.00 cents.

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Author

John Heinberg