- Corn futures saw some corrective and consolidation action on the session, with Dec corn finishing 6 cents higher. The market was supported by some short covering in an oversold market and supportive price action in the soybean market.
- The corn market added some weather premium as the short-term forecasts are showing significantly warmer and drier conditions over the Corn Belt into early next week.
- Cash basis has trended softer as the market is getting more comfortable with corn supplies from harvest a couple months away. The recent push lower in prices has moved U.S. corn to a more comfortable position versus Brazil’s export prices for the fall months. The key being, we will need to see if demand picks up in this window.
- Weekly export sales will be released on Thursday morning. Expectations are for 0-250,000 MT in sales for old crop, and 500,000-1,000,000 MT of new crop sales last week.
- The U.S. Dollar Index continues its recent rally, challenging resistance at Monday’s highs and trading at its highest level in 6-weeks. The U.S. dollar has strengthened against the Russian ruble, Brazilian real and the Chinese yaun currencies, which will impact export demand and the competition from Russian wheat prices, limiting the corn markets short term rally potential.
- Soybeans ended the day higher along with both soybean meal and oil, as the hot and dry two-week weather forecast adds support to prices and may lower crop ratings slightly. The recent rains came at a good time for pod fill, but the heat could ding yields.
- World vegetable oils have been strong over the past few days with Malaysian palm oil supporting soybean oil, which has had three consecutively higher closes. Additionally, domestic demand for soybean oil for biofuels has been increasing.
- Yesterday’s NOPA crush report for July was supportive as it revealed a record large crush number of 173.3 million bushels. Crush margins have been profitable, which has incentivized processors, increasing soybean demand. Soybean oil stocks fell more than expected to a 10-month low of 1.527 billion pounds.
- 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%.
- Renewed Russian attacks on Danube River terminals in Ukraine were not enough to interest traders today. Chicago wheat posted small losses, while Kansas City and Minneapolis futures had only modest gains.
- The US Dollar Index has been on both sides of neutral throughout today’s session, but did break through the 200-day moving average today and was in positive territory into the grain market’s close. This likely added pressure to wheat; the index has not been above this average since December 2022.
- From a technical perspective, all three US wheat futures classes are oversold and due for a correction. It is worth noting, however, that a commodity can become and remain oversold for quite some time during a strong downtrend.
- Weather could become a more important factor in the southern hemisphere with the evolving El Nino pattern. Argentina and Australia in particular, could see drought conditions with a significant impact on crops.
- Spot butter jumped 5.75 cents on a whopping 49 loads traded today, closing at $2.75/lb and a new 8-month high.
- Unfortunately, spot powder remains near a 2 1/2-year low to dampen the good news. Class IV futures closed slightly higher.
- Class III futures were under selling pressure today with the second month September contract finishing Wednesday at $17.91.
- Spot cheese was slightly lower while whey dropped back under the $0.26/lb mark.
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