CORN HIGHLIGHTS:

• The corn market finished with marginal gains within a wide trading range as the market digested a mixture of bullish and bearish news in Thursday’s USDA WASDE and Crop Production report. Going into the end of the week, corn futures are currently trading ¼ of a cent lower for the week.
• The USDA increased the expected corn yield to 183.6 bushels/acre, up 0.5 bushels from the August report. This increased new crop production by nearly 40 million bushels, which was above market expectations
• The USDA raised old crop demand for both exports and ethanol usage by a total of 55 mb, decreasing the old crop carry in. This combination of increased yield and increased demand lowered projected ending stocks to 2.057 billion bushels, down 16 mb from last month. This was the third consecutive month the USDA has lowered the carry out projection. The 2.057 bb carry out was slightly above market expectations, and keeps ending stocks heavy with a stocks-to-use ratio of 13.7%
• Weekly corn export sales were disappointing this morning as new sales totaled 667,000 MT (26.2 mb), below the low end of analyst expectations. Total exports for the concluded 2023-24 marketing year closed up 38% from last year.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher following a slightly bullish WASDE report today. Little was changed, but it was expected that yield estimates would be increased, and they were not. Export sales were solid which was supportive as China has stepped up its purchases of new crop soybeans. Both soybean meal and oil ended the day higher as well.
• Today’s WASDE report featured few changes for soybeans, but trade reacted positively as expectations were for a more bearish report. Yields were left unchanged from last month’s report at 53.2 bpa but ending stocks for 23/24 were lowered by 5 mb to 340 mb and for 24/25, ending stocks were lowered by 10 mb to 550 mb as a result of demand increases. Production was estimated at 4.586 bb.
• With this USDA report now out of the way, focus will be on the progress of US harvest, but another big factor to watch is Brazilian weather. Key growing areas in the country have been very dry which has prevented early planting. Rain showers are forecast to pass through the areas in need next week, but if rainfall totals end up being lighter than expected, soybeans could very well rally.
• Demand has been strong lately with profitable crush margins driving domestic demand. The USDA estimated that the value of crushed soybeans were around $13.54 per bushel in Illinois as of last Friday. Chinese purchases of new crop soybeans have been driving export demand as well as evidenced by today’s WASDE and export sales report.
• Today’s Export Sales report saw soybean exports at 54 mb for 24/25 and were in line with the average trade estimates. Soybean shipments are down 23% from last year and commitments are at their lowest levels in 5 years.

WHEAT HIGHLIGHTS:

• Wheat closed in mixed fashion, with small losses in Chicago and Kansas City, but modest gains for Minneapolis. A lower close for Paris milling wheat futures and not much excitement on the USDA report may have contributed to the relatively weak close for US futures.
• All eyes were on today’s WASDE report, which turned out to be relatively neutral for wheat. The 24/25 production number was unchanged at 1.982 bb which was expected. The next production estimate will be on the September 30 Small Grains Summary report. US 24/25 wheat carryout was kept unchanged at 828 mb, but the trade was looking for an 8 mb drop. Global 23/24 wheat ending stocks increased from 262.4 to 265.3 mmt, while 24/25 was kept steady at 256.6 mmt.
• In addition to today’s report, traders also received weekly export sales, which totaled 17.4 mb for 24/25. Last week’s shipments at 19.9 mb surpassed the 15.9 mb pace needed per week to reach the USDA’s export goal and sales commitments at 396 mb are up 30% from a year ago. Exports were kept unchanged today at 825 mb.
• A Russian missile is said to have hit a Ukrainian vessel carrying wheat and en route to Egypt. No casualties were reported, but the extent of damage is currently unknown. This may have factored some war premium into the market earlier this morning. In related news, Egypt has reportedly purchased 430,000 mt of wheat from Russia in a private deal, at $235 per mt CNF.
• According to the Rosario Grain Exchange, the Pampas region of Argentina is being affected by water shortages in the north and west areas. This is also expected to worsen, which may take a toll on the wheat crop. The previous production estimate of 20.5 mmt is now uncertain, with 30% of the crop reported to be in poor to regular condition.

DAIRY HIGHLIGHTS:

• Class III futures were lower for a second straight session which saw the December contract lose 19 cents to $22.10.
• Spot cheese, while positive couldn’t offer much support to the Class III market. Spot cheese gained 0.75 cents to close at $2.3575/lb. Whey was unchanged at $0.59/lb.
• Class IV futures were negatively impacted on light volume and losses to products on the spot trade. The 2024 Class IV average currently sits at $21.12.
• Spot butter lost 9 cents on the day, marking the largest down day since May 28. Butter closed at $3.0850/lb while powder lost 0.25 cents to close at $1.3950/lb.

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Author

John Heinberg