CORN HIGHLIGHTS:

• It was a very quiet session in the corn market on Thursday as prices traded on both sides of a narrow trading range to close just fractionally higher in the Dec corn futures. The market is looking for news and squaring positions going into next week’s USDA report on Tuesday.
• Next week’s USDA report will be looking at crop production and likely making demand adjustments. Expectations are for yield to be lowered to 173.5 bushels/acre from 175.1 last month. The movement of demand may be the key to prices as reduced demand will likely keep the carryout projection for the marketing year relatively large, limiting price rallies. The market is concerned about a possible acre adjustment that could also increase the potential corn supply.
• The USDA will release the last export sales report for the 2022-23 marketing year on Friday morning. The expectations for corn or old crop sales of  -200,000 to 100,000 MT and new crop sales of 400,000 to 1,000,000 MMT. Export demand remains lackluster and has limited price.
• Corn prices have been trading in a sideways, consolidative pattern since mid-August. The narrowing, choppy pattern may be setting the market up for a break in either direction, likely triggered by the reaction to the report on Tuesday next week.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower, erasing all gains made yesterday as trade remains rangebound. Soybean oil was down over 2.5% in the December contract with soybean meal lower but not by as much. Soybean oil has been pressured by lower palm oil.
• Analysts are anticipating yields between 49 and 50 bpa, but the planting estimate of just 83.5 million acres could lead to an even tighter carryout unless the USDA finds more soybean acres on Tuesday.
• Soybean export demand has remained active with another sale yesterday announced of 9.2 mb to unknown destinations. This brings new crop total sales to 526 mb, which is decent but still 370 mb lower than a year ago.
• Soybeans on the Dalian exchange are trading at the equivalent of $18.80 a bushel, which is near the yearly highs and has spurred imports. China’s soybean imports for August were seen rising to 9.36 mmt which is up 31% from a year ago.

WHEAT HIGHLIGHTS

• All three wheat classes ended the day lower, as traders began consolidating positions and taking profits from Wednesday’s gains ahead of Tuesday’s USDA September WASDE update.
• Adding to the negative tone to the wheat markets, Matif wheat futures were lower again on slow EU and U.S. exports record setting Russian export pace. Although, the U.S. recently sold South Korea 88k mt of milling wheat for their flour mills for November/December shipment.
• Russia continued its drone attacks on both the Black Sea and Danube River ports, damaging port and grain facility infrastructure, and injuring one person. This recent attack was the fourth such strike in five days.
• Not many changes are expected in Tuesday’s WASDE update. The average trade guess for U.S. carryout is 614 mb, down 1 mb from last month, and the average guess for 23/24 world carryout is 265 mmt, 600k lower than last month.
• Statistics Canada is also expected to release its July-23 stocks estimate tomorrow, with all wheat stocks expected to be near 4 mmt, up from last year’s 3.663 mmt.
• While some of Wednesday’s strength could be attributed to the market adding war premium, concerns regarding dry conditions contributing to smaller Australian and Argentinian crops and too much rain affecting the quality of Brazil’s wheat also likely contributed.

DAIRY HIGHLIGHTS:

• Class III futures held solid gains on Thursday led by 26 and 27-cent gains for the October and November contracts.
• Spot cheese was unchanged on zero loads traded today while spot whey dropped a penny to $0.31/lb.
• Class IV contracts were also higher as well with most holding solid, double-digit gains by the afternoon close. Both butter and powder gained a penny.
• Total dairy exports for July were 212,194 metric tons, down 10% from July 2022 and down 4% from the month prior.
• Cheese exports were down just 1% YoY at 36,778 metric tons vs. a drop of 19% between June 2022 and June 2023.

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Author

John Heinberg