CORN HIGHLIGHTS:

• Building harvest pressure and logistical concerns that could be a concern brought sellers back into the corn market today. Despite wheat futures trading higher, strong selling pressure in the soybean market helped limit any potential gains in corn futures.
• USDA released weekly crop ratings on Monday afternoon. The current crop is still rated 64% good to excellent, steady with last week. In maturity, 74% of the crop is dented, 29% considered mature. Early harvest has begun in southern growing regions, and 5% of the crop has been harvested, slightly ahead of the 5-year average at 3%.
• The Mississippi River levels at Memphis have dropped to record low levels, limiting barge traffic on the river. The increased freight cost will weigh on corn exports as US corn prices are rising versus global grain competition. In addition, limited river movement may cause a backlog of freshly harvested corn, impacting the cash market as harvest picks up speed.
• Thursday the USDA will release the next WASDE and Crop Production report. Expectations are for US corn yield to be lowered by 0.4 of a bushel to 182.7 bu. per acre reflecting the variability in this year’s corn crop. Regardless, this is still a record for US corn yield.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day sharply lower, taking out all of yesterday’s gains as pressure from crude oil and a Crop Progress report that showed high crop ratings pressured the market. Both soybean meal and oil were sharply lower as well with soybean oil in particular taking a bigger hit due to the drop in crude.
• Today, crude oil fell by nearly $3.00 a barrel and last traded at $66.00 per barrel, the lowest level since July of 2023. This came after OPEC stated that it was lowering its demand forecast for the second time in two months. They expect demand to grow by 2 million bpd, which is 80,000 bpd slower than the previous forecast. The slowdown in demand is reportedly due to lower Chinese consumption.
• Yesterday afternoon, the USDA released its Crop Progress report which showed good to excellent ratings for soybeans unchanged from last week at 65%. Trade was expecting ratings to decline by 2 points to 63% on account of the recent dry stretch. 25% of the crop was dropping leaves which compares to 13% a week ago and the 5-year average of 21%.
• This Thursday, the USDA will release its Supply and Demand report, and estimates are calling for ending stocks to be relatively unchanged, but the average yield is expected to rise slightly with the average trade guess at 53.3 bpa which would compare to last month’s guess of 53.0 bpa.

WHEAT HIGHLIGHTS:

• All three wheat classes posted gains, even as corn closed lower and soybeans declined sharply. Crude oil also saw a significant drop after OPEC cut its demand forecast for the second consecutive month. However, wheat managed to defy this negative sentiment, likely supported by reports of lower Russian yields and anticipation of a possible Fed rate cut next week, which could weaken the US Dollar. Additionally, some short covering may be occurring ahead of Thursday’s WASDE report.
• Yesterday afternoon’s USDA Crop Progress report showed that 85% of the spring wheat crop has been harvested, slightly ahead of both last year and the 5-year average of 83%. The report also noted that 6% of the winter wheat crop has been planted, matching the average and up 1% from the same time last year. Meanwhile, a tropical storm in the Gulf is expected to make landfall tomorrow evening, which could bring heavy rains and delay SRW crop planting in some areas.
• IKAR has reportedly reduced their estimate of the Russian wheat crop by 1.6 mmt to 82.2 mmt. Adverse weather in Volga, Urals, and Siberia is cited as the reason for the decline. Corn production was also cut to the lowest level since 2018. Additionally, their Russian wheat export forecast was also dropped by 0.5 mmt to 44 mmt.
• Despite high import prices, Brazil is reportedly taking in more wheat. According to data from Secex, 2024 wheat imports from January to August reached 4.556 mmt, which is the largest total since 2020 and is also 9% above 2023. Additional data from CONAB suggest that 11.6% of Brazil’s wheat crop has been harvested as of last week.

DAIRY HIGHLIGHTS:

• After a falling late last week, buyers have returned to the Class III market for a second day with second month October futures hitting $23.92 on the close, up 38 cents.
• Spot cheese jumped to a new high for the move, gaining 4.50 cents to close at $2.3225/lb. Spot whey continues to hang under $0.60/lb.
• All Class IV futures beyond front month September closed positive on Tuesday as the second month October approaches $23.00.
• Class IV spot trade was mixed with butter down 1.50 cents and powder gaining the same amount to push to $1.3950/lb.

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Author

Amanda Brill