CORN HIGHLIGHTS:

• Corn futures traded to a fourth consecutive higher high on the daily trade, as December corn futures gained 3 ½ cents for the session. In this recent move, Dec corn has now added 21 cents of value off the contract low. The market is seeing short cover and technical buying leading into the end of the month and tomorrow’s USDA Grain Stocks report.
• The USDA will release the quarterly Grain Stocks report tomorrow. Expectations are for September 1 grain stocks to be at 1.429 billion bushels. This would be the highest September total in 3 years, and approximately 50 mb above last year’s report.
• Export sales last week totaled 842,000 mt (33.1 MB) in the weekly Export Sales report released on Thursday morning. Corn sales commitments now total 495 mb for 23/24 and are down 3% from a year ago. Last week’s shipments were 28.7 mb, which is below the pace needed to reach the USDA export target.
• Ethanol margins remain strong, supported by strong crude oil prices, and corn usage so far this year has increased over last year. Though early, corn used for ethanol is running 10.5 mb, or 3.6% above last year, to start the marketing year.
• Short-term weather patterns look drier, which should keep harvest moving forward.  The fresh supply of corn into the pipeline should keep basis and the market under pressure.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day slightly lower, but came back significantly from their early morning lows. November soybeans are struggling to get back above the 100-day moving average and settled just below it today. Soybean meal ended higher, while soybean oil was lower.
• For the week ending September 21, the USDA reported an increase of 24.7 mb in soybean export sales for 23/24, which was in line with expectations. Last week’s export shipments of 20.0 mb were below the 35.1 mb needed each week to meet the USDA’s export estimates.
• Tomorrow, the USDA U.S. quarterly Grain Stocks report will be released, and average expectations are for ending stocks to come in at 244 mb, which would be down from the USDA’s September estimate of 250 mb. This report will give a better indication to the yields that can be expected, and analysts have been seeing yields closer to 49 bpa rather than the USDA’s last guess of 50.1 bpa.
• The U.S. soybean harvest should pick up speed in the coming days, with little rain expected over the next week. Drought conditions are still prevalent in the Midwest, and heavy rains would be needed to improve soil moisture levels.

WHEAT HIGHLIGHTS:

• The USDA reported an increase of 20.0 mb of wheat export sales for 23/24. Shipments last week of 21.5 mb, were above the 14.1 mb per week pace needed to meet the USDA’s export estimate of 700 mb for 23/24.
• Tomorrow, traders will receive the quarterly grain stocks and small grains summary reports. Pre-report estimates peg September 1^st wheat stocks at 1.774 bb, compared with 1.778 bb last year. Additionally, the final production pre-report estimate for all U.S. wheat comes in at 1.731 bb, versus 1.734 bb in August, and 1.650 bb in 2022.
• Egypt purchased 180,000 mt of wheat, but it was not sourced from Russia. Reportedly, 120,000 mt came from Romania, while the remaining 60,000 mt came from Bulgaria. Despite their dominance, these offers were said to have beaten out Russia’s FOB values by $10-15 per mt.
• Outside influences are still pressuring wheat. Despite today’s drop in the U.S. Dollar Index, it remains at a very high level that is sure to keep weighing on U.S. exports, wheat in particular, and a lower close for Paris milling wheat futures today did not help the situation.
• The Ukrainian agriculture ministry kept their 2023 grain crop estimate unchanged at 57 mmt. According to officials, their grain harvest this year is better than expected so far.
• Brazil and Argentina have both issued complaints against a new EU policy, which is requiring certification that Argentine and Brazilian soybean meal is not from deforested areas. This may be difficult to regulate, but in any case, the policy starts October 1^st. While this does not have a large impact on wheat, it could have a broader impact on the agricultural trade out of South America overall.

DAIRY HIGHLIGHTS:

• Class III futures were down marginally on the day with the second month October contract dropping 9 cents to $16.71.
• This came amidst another red day for cheese in which the overall block/barrel average fell 4.25 cents to move just under $1.60/lb.
• The Class IV spot markets remained hot with spot butter hitting a new all-time high at $3.3350/lb and powder up a half-cent to $1.1825/lb, its highest close since May.
• Despite this Class IV futures closed with losses as the spot market buying did not carry over into milk.

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Author

Amanda Brill