- Despite a friendly turn higher in the wheat market, strong selling pressure in soybeans and likely early harvest pressure limited the corn market on the day. Dec corn lost 4 1/4 cents on the session and was down 7 1/2 cents for the week.
- Cash basis levels will likely be under pressure as corn harvest begins. Corn harvest was 5% complete last week and will likely see good progress again this week. Weather forecasts overall are likely to support an ongoing harvest.
- The corn market is still in a sideways to lower and overall consolidating type trade. $4.80-$4.85 remains a strong level of resistance over the Dec contract, with support off Tuesday’s low of $4.73 1/2 as the market moves deeper into harvest.
- Ethanol margins have remained strong, with softening corn prices, and crude oil pushing through $90 a barrel. Ethanol production will likely stay supportive in the market.
- Demand will stay a focus in the market as export demand is still soft. Current total sales commitments for the marketing year are at 439 mb, down 9% from last year’s levels, while the USDA is forecasting an increase in export sales.
- Soybeans ended the day lower with a loss of 22-3/4 cents for the week in the November contract following lackluster August soybean crush numbers. Soybean meal ended lower, while soybean oil ended higher with help from gains in palm oil.
- The August NOPA Crush report was released and showed 161.453 mb crushed, well below estimates of 167.8 mb. This crush number was well below last month’s 173.3 mb, but ahead of last year. Soybean oil stocks came in at 1.250 bp, which was below estimates of 1.527 bp.
- This week, soybeans were pressured by a reduction in usage on the WASDE report, although ending stocks were called at 220 mb, a very tight number that may only be offset by the expectations for another massive Brazilian crop.
- U.S. drought exposure for both corn and soybeans increased as of September 12, with soybean crops in drought rising by 5% and reaching 48%. This could cause another decline in soybean’s good to excellent ratings in Monday’s Crop Progress report.
- El Nino, according to the U.S. Climate Prediction Center, has a 95% chance of continuing through the end of March. Typically, this weather pattern brings drought to areas like India and Australia, but rains to Brazil and Argentina.
- Argentina’s recent rains led to a 6% increase in their crop condition, but still only climbed to a low 24% good to excellent. Despite the El Nino pattern, October looks mostly dry for that region, but globally, drought is expanding in areas like Australia, which could affect their wheat production.
- Stats Canada said that due to drought, Canadian all wheat production will decline to 29.8 mmt versus 34 mmt last year. That represents a 13% year on year reduction as yields are anticipated to be down 17.6%.
- Ukraine is asking Poland not to impose a new grain import ban. Poland has stated that they will implement a ban if the EU ends their current restrictions. Also, while the Black Sea Grain Initiative remains closed for now, one ship has left the Odessa port, traveling via a different route.
- As of September 12, the USDA estimates about 59% of the U.S. spring wheat production area remains in drought.
- The spot cheese price settled at $1.845/lb. on Friday; the market has fallen 6.5 cents the last two weeks.
- Inversely, spot butter prices were higher for the second straight week, up to $2.7175/lb.
- Class IV markets held court this week and retook a premium advantage to Class III
- Next weeks fundamental reports/events: Monday is August milk production, Tuesday is Global Dairy Trade
Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.