CORN HIGHLIGHTS:

• Strong selling pressure across the markets in general helped push Dec corn futures to new lows for the move, losing 12 ¼ cents on the day. Prices saw additional selling pressure as Dec crossed through support at the $4.80 price level, triggering long liquidation and technical selling. Price action remains weak in the corn market.
• The improved weather saw corn conditions rating jump to 59% good to excellent, up 2% over last week, and now higher than last year’s levels. Analysts were expecting a 1% increase. Key states of Illinois, Indiana, Michigan, and Missouri saw improvements from recent rainfall totals.
• The improved crop conditions have some analysts in the corn market feeling the current USDA yield of 175.1 may be too low and will increase in future reports, increasing the supply side of the corn balance sheet.
• An upcoming heat ridge building into the end of the week will likely bring well above normal temperatures that could stress the developing crop. The market will be focused on the length of the heat wave and any potential stress.
• Wheat prices struggled and broke technical support, putting spillover pressure into the corn market. The Russian ruble has tumbled in value, making the already less expensive Russian wheat more attractive to the export market.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower following yesterday’s Crop Progress report, which showed significant improvements in crop ratings for soybeans. Additional pressure has come from weak Chinese economic data. Soybean meal closed lower, while bean oil closed higher.
• Yesterday’s Crop Progress report showed the soybean crop’s good to excellent rating improving by 5% nationally to 59%. Illinois had one of the sharpest recoveries with an improvement of 12 points to 70% good to excellent. The upcoming dry and hot weather forecast could hurt yields, which would be supportive to prices.
• In China, economic data was released that showed weaker growth than the country had been previously touting. Industrial production came in at 3.7% versus the estimate of 4.4%, and retail sales were only 2.5% compared to the estimate of 4.5%.
• Yesterday’s large sale of 15.3 mb of soybeans to unknown destinations for the 23/24 marketing year was an addition to the recent string of sales, and demand in the US remains strong as well, with profitable crush margins incentivizing processors.

WHEAT HIGHLIGHTS:

• Black Sea tensions are not offering much support to the wheat market, despite the fact that Russian missiles caused civilian deaths in western Ukraine. Additionally, the Russian ruble has tumbled in value, making already less expensive Russian wheat more attractive to the export market.
• IKAR increased their estimate of the Russian wheat crop to 89.5 mmt versus previous estimates of 88 mmt. They cite higher yields in some areas as the reason for the revision.
• Spring wheat condition improved 1% on yesterday afternoon’s Crop Progress report to 42% good to excellent. Additionally, spring wheat harvest is said to be 24% complete, while winter wheat is 92% harvested.
• By this weekend, temperatures are expected to be 90-100+ degrees as far North as South Dakota and could cause some late-season stress for crops. While it will have less of a direct impact on wheat, the impact on corn and soybeans could affect grain prices as a whole.
• Wheat harvest has started in Parana (Brazil). So far, it looks like production will be behind last year. CONAB estimated Brazil’s wheat output at 10.41 mmt, which would be down 1.4% from last year. They may still have a domestic surplus, however, which could mean more exports and competition for the U.S.
• Funds are likely adding to short positions in Chicago wheat and are now estimated to be short about 70,000 contracts.

DAIRY HIGHLIGHTS:

• 2023 Class III futures staved off double-digit losses this morning to close unchanged to higher, led by a 21-cent gain in the September contract.
• The block/barrel average jumped 2.50 cents to close at $1.9325/lb, a new high for the move. Cheddar blocks are back over $2.00/lb for the first time since March.
• Class IV futures bid lower today, despite only February 2024 futures seeing any trades take place.
• Spot butter was a quarter-cent higher to push just under $2.70/lb, but spot powder dropped 1.50 cents to move back under $1.10/lb.
• The Global Dairy Trade Auction this morning was overall friendly for cheese but negative across the board for other products.

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Author

Amanda Brill