The CME and Total Farm Marketing offices will be closed
September 4, in observance of Labor Day

CORN HIGHLIGHTS:

• Corn prices consolidated, trading within Thursday’s trading range as the market squared positions for the 3-day weekend, waiting for new news. Dec corn gained 3-1/4 cents on the day but was still down 6-1/2 cents on the week.
• News was relatively quiet on Friday as the market keeps a close eye on the forecast for excessive heat across the middle of the country going into next week. While most of the corn crop is in the finishing stages, the high temperature will speed up maturity, and limit any additional potential the corn crop could have in most areas.
• Grain markets are becoming concerned about the water levels on the Mississippi River for the fall harvest window. Barge restrictions have been put in place, limiting grain movement, and will have the potential to impact cash basis levels going into the fall months.
• September corn futures moved into the delivery window against long contract positions, and again the CBOT reported “Zero” deliveries against the September contract, which is supportive of price.
• The wheat market and outside markets have potential to influence the corn price going forward. Wheat futures continue to push to new calendar year lows and a strong U.S. Dollar Index limited gains, but crude oil closed at its highest levels since last summer, which should support ethanol and corn prices.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day slightly higher and essentially unchanged despite prices beginning the session significantly higher. Soybean meal closed lower, but soybean oil ended higher with support from crude oil and higher Malaysian palm oil.
• Export sales have been active with a new sale reported every day this week as the U.S. becomes more competitive with Brazilian offers for new crop soybeans. Today a sale of 198,000 mt of soybeans was sold to unknown destinations.
• There are slight chances for better rainfall in the middle of the Corn Belt over the next 7 days, but the benefits may be limited with harvest nearing. Temperatures are forecast to be hot but have turned slightly cooler than expected over the next week. The heat and dryness may push the crop into early maturity.
• Soybean crush has been very active with profitable crush margins. The U.S. Energy Department reported that 1.21 billion pounds of soybean oil was used to make biofuels in June which is a new record high and up 49% from a year ago.

WHEAT HIGHLIGHTS

• Current U.S. export sales commitments are running 23% behind last year, and the slow pace not only adds resistance to prices but also fuels funds that are using the wheat market to hedge long positions in soybeans.
• IKAR raised its production estimate for the Russian wheat crop to 91 mmt, up from 89.5. The agency also increased its Russian wheat export estimate to a record 50 mmt, which is up from last year’s 46 mmt.
• News of UN Sec-General Guterres sending Russia a set of proposals to revive the Black Sea grain deal is likely adding resistance to the market. Putin and Turkish President Erdogan are set to meet Monday to begin discussions.
• Australia has been dealing with very hot and dry conditions for this year’s wheat crop. After forecasting a 34% decline in production back in June, some analysts believe the country may reduce exports by as much as 10 mmt for the 23/24 season, which could be a major blow to a key buyer, China. By comparison, Australia exported over 32 mmt for 22/23.
• El Nino rains have yet to come to help Argentina’s wheat crop, which is beginning to lose its yield potential in prime areas according to Buenos Aires Grain Exchange. Although forecasts for rain in September could help the crop get through its next growth stage.

DAIRY HIGHLIGHTS:

• The second month Class III contract closed lower on the week for the first time since the week of July 3rd.
• For the first time since April, Class III is now at a premium to Class IV on the second month contract on a weekly close.
• Open interest in Class III futures is at its lowest level since March of 2020.
• Dairy cow culling for week ending Aug 19th was +1.2% YoY.

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Author

Amanda Brill