CORN HIGHLIGHTS:

• Corn futures traded to a third consecutive higher high on the daily trade as December corn futures gained 3 ½ cents for the session. Despite selling pressure in the wheat market, and higher U.S. dollar, corn futures were supported by a strong move higher in crude oil, and additional short covering.
• Ethanol margins remain strong, and early in the marketing year corn usage has increased over last year. Estimated corn use last week for ethanol was 97.5 MB. This was better than last week and the same week last year. Strong crude oil prices help support the ethanol margins.
• Thursday morning will bring the next round of weekly export sales from the USDA. Expectations are for new sales to be from 475,000 mt to 1.2 mmt for last week. Demand has ticked up slightly, helping support corn prices.
• USDA will release the quarterly Grain Stocks report on Friday. While there is variability in corn usage for this report, expectations are for overall grain stocks to be slightly higher than last year’s totals for this report.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher for the fourth consecutive day, but the November contract was unable to find a solid close above the 100-day moving average. Support came from a rally in crude oil which was supportive to soybean oil, but soybean meal closed lower.
• Some analysts are expecting average soybean yields to come in around 49 bpa, and this Friday’s Grain Stocks report is expected to see 22/23 soybean stocks falling slightly to an estimated 242 mb. Ending stocks for 23/24 are currently estimated by the USDA at 220 mb, but that number could end up even smaller.
• With significant Chinese purchasing, Brazilian soy exports are now seen reaching 6.23 mmt in September which compares to 3.58 mmt in the same month a year ago. Soybean meal exports are expected to reach 2.18 mmt in September compared to 1.75 mmt, as Brazil picks up business from Argentina.
• Brazilian soybean planting is 1.9% complete as of September 21, but weather conditions have been very hot and dry in the central and northern regions. That weather pattern is expected to change by the end of this week to offer more rain.

WHEAT HIGHLIGHTS:

• The wheat market was under pressure today and closed with losses in all three U.S. futures classes. One of the main reasons could be attributed to the jump in the U.S. Dollar Index, which is approaching the 107 mark; it has not reached this point since late November 2022.
• The decline in U.S. wheat prices is making U.S. offers more competitive on the world market, but exports are still being undercut by other suppliers. Tunisia is said to have purchased Russian wheat for $234 per ton, well below Russia’s official floor of $270. Egypt is also said to be in talks with Russia to purchase up to 1 mmt of wheat. And there is also talk that China purchased between one and four cargoes of wheat from France.
• The European Union’s soft wheat exports between July 1 and September 24 have reached 6.88 mmt versus 9.42 mmt for the same timeframe last year, representing a 27% decrease.
• There are still global concerns about wheat production. Argentina’s drought is forecasted to worsen over the coming weeks, and Australia is also still hot and dry.
• On Friday, traders will receive the quarterly stocks as well as the small grains summary reports. The latter will include final wheat production estimates. Given that it is also the month and quarter end, traders and funds may be squaring up positions beforehand.

DAIRY HIGHLIGHTS:

• Spot butter was bid another 12c higher on Wednesday and closed up at $3.30/lb. This is a new all-time high.
• Butter has closed higher for eight sessions in a row and has added 58.25c over that stretch.
• Second month Class IV shot up 56c and closed over the $21.00 handle to $21.01. This is a new contract high.
• Spot cheese fell 1.125c and closed at $1.6375/lb. The cheese market has closed red in eight out of the last nine sessions.
• Both October and November 2023 Class III closed the day below the $17.00 mark.

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Author

John Heinberg