CORN HIGHLIGHTS:

• Corn prices pushed higher with December closing up 4 ½ cents on the session. The talk of hot weather pushing the crop to maturity and possibly limiting final production, along with technical buying and short covering helped support the market.
• Excessive heat across the middle of the country over the weekend likely pushed the crop close to maturity and limited any additional potential the corn crop could have in most areas. The temperature looks to moderate later in the week with improved rain chances in the northern plains.
• Weekly crop ratings are likely to reflect the impact of high temperatures across the Midwest this past weekend. The percentage of Good/Excellent is expected to drop to 54%, down 2% from last week. Crop maturity may be a bigger focus, which last week saw 9% of the corn crop classified as mature, up 5% on the week and 1% over the 5-year average of 8%.
• 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. This may be more tied to the pressure in the soybean markets but is likely limiting buying strength in corn.
• The last weekly export inspection report for the marketing year saw 481,000 MT of shipments last week. This is still down 32% year over year with the new marketing year beginning on September 1.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day mostly lower along with both soybean meal and oil despite the hot and dry weather, decent export sales, and the possibility of deteriorating yields. The U.S. Dollar hit a 6-month high today which may have pressured the soy complex.
• Although it did not provide any support today, crude oil rallied sharply which could be beneficial to soybean oil down the road. The rally came after Saudi Arabia said that it would extend its voluntary cut of 1 million barrels per day until the end of the year.
• There was a sale reported this morning of 251,000 metric tons of soybeans for delivery to unknown destinations for the 23/24 marketing year, and export inspections totaled 13.9 mb for the week ending Thursday, August 31 which was a bit light.
• July soybean crush was reported to be a new record for July at 184.8 million bushels which was up 2% from July last year. Crush margins have been very profitable and have incentivized processors. Malaysian palm oil was down 2.13% today which likely pressured soybean oil.

WHEAT HIGHLIGHTS

• For the week ending August 31, the USDA reported that 300,000 mt of wheat were inspected for export, toward the low end of expectations and versus 390,000 inspected the week prior, and down 24% from last year versus the USDA’s forecast of down only 8%.
• In Friday’s Commitment of Traders report, Managed Money sold nearly 9k contracts of Chicago wheat, bringing their short position to just under 80,000 contracts.
• Monday’s talks between Russia and Turkey ended without reviving a Black Sea export corridor deal. Putin stated that he wasn’t interested in renewing a deal unless obstacles to Russian ag exports were removed. Additionally, Russia would like to reopen an ammonia pipeline and be admitted back into the SWIFT banking system.
• Prior to Russia’s and Turkey’s talks, Russia attacked another Ukrainian port on the Danube River, and despite the attacks, Ukraine is looking to boost its exports via the river. To that end, the Ukrainian grain industry is lobbying Ukraine and Romania to add anchorage points in the Danube off the coasts of both countries.
• According to ABARE, the Australian government shaved 3% off its June estimate of the Australian wheat crop to 25.4 mmt, representing a 36% decline from last year’s record crop and 4.6 mmt below the USDA’s current 29 mmt estimate. The decline in production may have China, who is a major importer of Australian wheat, looking for other sources for its supply needs.
• The Rosario Grains Exchange stated that Argentina recently received between 1.18 and 3.94 inches of rain in some key growing areas and may have been enough to relieve the wheat crop that has been struggling with dry conditions.

DAIRY HIGHLIGHTS:

• Coming off the holiday, Class III futures closed with both small gains and losses to start the week with October futures down 4 cents.
• Spot cheese was down slightly on no trades while spot whey jumped 1.50 cents, closing at $0.32/lb and its highest point since May 8th.
• Class IV action was unchanged to higher thanks to a solid spot butter trade, which jumped a nickel to move back over $2.70/lb.
• Powder, however, was lower once again and approaching a move underneath $1.00/lb.
• July cheese production was down 0.70% YoY while butter production during the month was up 3.50% from July 2022.

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Author

John Heinberg