CORN HIGHLIGHTS:

• Buyers returned to the corn market after December futures pushed to the lowest level in two years in the overnight session. During the day session, December futures reversed higher, closing 4 ¾ cents higher on the day, with the market supported by short covering and value buying.
• The strong price action sets the corn market up for some potential bullish follow through. Managed money is holding a large short position in the corn market, and the turn higher could trigger additional short covering and technical buying.
• The weekly crop progress report showed corn maturity at 54% mature, up 20% from last week and 10% over the 5-year average. Corn harvest is beginning to pick up, at 9% harvested versus 5% last week. The 5-year average is 7% harvested for this time frame.
• Harvest pressure will likely push on cash basis. Weather forecasts overall are likely to support any ongoing harvest. The long-range forecast should support harvest activity overall as rainfall totals will be variable, but the temperature trend is above-average for the next two weeks.
• Strong crude oil prices will likely stay supportive of the corn market, helping support ethanol margins. Last week ethanol production was strong, and the latest EIA report will be released on Wednesday to potentially show additional production strength for the fuel.

SOYBEAN HIGHLIGHTS:

• Soybeans closed slightly lower but bounced off sharper lows earlier in the day after finding support near the 100-day moving average. Soybean meal ended higher, while soybean oil was pressured by lower global veg oils.
• Yesterday afternoon, the USDA released crop progress which surprisingly showed no change in the good to excellent ratings for soybeans and was kept at 52%, but focus is turning to the early maturation and soybeans dropping leaves which came in at 54%, up from 31% last week.
• In central and southeast Brazil, dryness and intense heat is forecast throughout the week which is bringing concern for recently planted soybean seedlings. With such a tight U.S. carryout, Brazilian weather problems this season could provide bullish momentum to the market.
• Low water levels on the Mississippi River are negatively impacting basis for many producers, but rains forecast in the northwestern Plains and Midwest through Saturday could make their way to the river to raise levels in the next two weeks.

WHEAT HIGHLIGHTS:

• According to the USDA, 15% of the winter wheat crop is now planted, up from 7% last week. Additionally, 93% of U.S. spring wheat is harvested versus 87% last week.
• Russia continues to dominate on the export front with wheat export values reportedly falling again.  Consultancy IKAR is indicating $235 per tonne FOB, while Sov Econ is reporting $245 per tonne.  Their dominance also includes sales to China. China’s January – August wheat imports total 9.6 mmt, up 53% from last year.
• The first of two civilian vessels to have entered Ukrainian ports have reportedly left with 3,000 mt of grain. While it is unclear what percentage of that was wheat, what is clear, is the fact that Ukraine is doing everything in their power to export in spite of the war.
• Rio Grande Do Sul is the top wheat producing state in Brazil, and the rain they are receiving could cause damage and quality concerns. Apparently, the rate of disease is increasing. Nevertheless, Brazilian wheat prices are declining due to harvest pressure and good supply. Like Russia, this could put pressure on U.S. exports.
• The Australian Bureau of Meteorology has come out and stated that El Nino is likely to last through February. This pattern typically means less rainfall in eastern Australia. With a heat wave going through, and dryness already expanding, this does not bode well for their crop.

DAIRY HIGHLIGHTS:

• The US butter and cheese trade are moving in opposite directions. Butter just hit a new high of year on Tuesday, while cheese hit its lowest price since July 21st.
• The cheese weakness is pressuring Class III lower. Most contracts were down double digits on Tuesday as second month fell 26c to $17.54.
• So far this week, US spot butter is up 11.25c. GDT butter was up nearly 4% in today’s auction.
• Milk production in August was down 0.20% YoY at 18.975 billion lbs. Cow numbers were down 16,000 head from August 2022 but unchanged from July.

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Author

Brandon Doherty