CORN HIGHLIGHTS:

• Buyers stepped into the corn market on Tuesday as traders covered short positions triggered by an optimistic turn higher in the wheat market, and trading activity before First Notice Day on September contracts and the three-day Labor Day weekend.
• The key is whether price movement after today’s session will be followed through on Wednesday. In the last three weeks, corn futures have had a strong day of buying, only to be followed by selling pressure the next few sessions to remove those gains. With a large supply forecast and a limited demand base, the corn market is still in a defensive posture and rallies are met with selling pressure.
• Rallies in the corn market are limited by producer selling pressure as September First Notice Day is Friday this week, and producers are likely pricing September basis contracts or moving old crop bushels. Most basis contracts will likely need to be priced or rolled out by the middle of the week.
• This morning, the USDA announced an export sale for corn to Mexico, which purchased 127,760 mt (5.03 mb) of corn for the new marketing year.
• USDA released weekly crop ratings yesterday afternoon. The corn crop dropped 2% to 65% good to excellent, 1% below market expectations. Crop ratings typically fall off as the crop gets closer to maturity.  As of Sunday, 84% of the crop was in dough stage, 46% dented, and 11% mature. All three ratings were above the 5-year average.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher for the third consecutive session, and so far, November soybeans have gained 13 ½ cents this week. Today’s upward move followed yesterday’s crop progress report, which showed a slight decline in conditions from the previous week. Soybean meal also closed higher, while soybean oil finished lower, in line with the decline in crude oil prices.
• Yesterday, the USDA released its Crop Progress report and the good to excellent rating for soybeans came in at 67%, which was down 1% from last week. 89% of the crop is setting pods, which compares to 81% a week ago and the 5-year average of 88%. 6% of the crop is dropping leaves, compared to 4% last year and the average of 4%.
• In Indonesia, palm oil production is expected to fall by as much as 5% from last year as a result of adverse weather and old palm trees. The US has estimated that global palm oil reserves are headed for their lowest levels in three years, which could be supportive to world veg oil prices and US soybean oil.
• There have been no export sales reported so far this week, but US soybeans are priced very competitively, and China is expected to need a large amount of soybeans by the end of the year. There have also been rumors of potential Chinese purchases, which could be confirmed before the end of the week.

WHEAT HIGHLIGHTS:

• Wheat finished with double-digit gains in Chicago and Kansas City futures, with smaller gains in Minneapolis. Support came from higher corn, soybeans, and Matif wheat futures; the Paris contracts closed higher for the first time in the past five sessions. The US Dollar index testing yesterday’s low was also helpful. It was noted that September and December Chicago wheat posted bullish key reversals; however, today’s risk-on trade in grains may have been mostly technical in nature due to a lack of fresh news.
• The USDA rated the spring wheat crop at 69% good to excellent, down from 73% last week. And while this was perhaps a bigger than expected drop, conditions remain well above year ago levels of 37% good to excellent. Additionally, 51% of the crop is harvested, compared to 31% last week, 50% last year, and 53% on average.
• According to a Bloomberg survey, Canadian 24/25 wheat production is expected to increase 5.8% to 33.8 mmt from 32 mmt last season. Estimates ranged from 32 to 35.1 mmt. Canola production was also forecast to increase by 4%.
• The Rosario Grain Exchange stated that the recent rains in Argentina were not enough to boost the wheat crop. Winter frosts and a lack of rain are concerning; however, storms are predicted to move through this weekend. These may bring better rain coverage, but it remains to be seen how intense they will be. Argentine wheat is currently developing, with harvest typically starting in November and ending in January. Recent frosts have also been a concern in southern Brazil.

DAIRY HIGHLIGHTS:

• Both spot powder and butter closed Tuesday into new highs for the year. Powder was bid 1.75c higher to $1.3150/lb while butter gained 2.25c to $3.1975/lb.
• After the limit up day yesterday for Class III, contracts eased off Tuesday on lighter volume. The fact that spot cheese blocks and barrels were both unchanged on no loads traded kept futures steady.
• Q4 2024, Q1 2025, and Q2 2025 Class IV milk futures averages all closed into new all-time highs.
• October Class III finished the day down 22c to $22.83, and did drop 57c from its intraday high of $23.40.
• Both October and November Class IV milk were able to close over the $23.00 threshold as the market holds bullish on steady spot market bidding.

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Author

Brandon Doherty