CORN HIGHLIGHTS:

• Corn futures finished the session lower, pressured by the prospects of large US and global corn supplies, and selling pressure in the wheat market triggered by a jump in the value of the US dollar.  March corn lost 3 ½ cents on the session, but did hold above Friday’s report day lows.
• The corn market continues to look for positive news after Friday’s USDA Grain Stocks and WASDE report. US corn carryout was raised by 30 mb to 2.162 bb, but the 12 mmt rise in Chinese corn production helped surge world ending stock above expectations, reflecting a potential record Chinese corn crop. The heavier global supplies keep pressure on a market searching for demand.
• Demand will stay a focus for the corn market and the need for export sales is important. The USDA announced a flash sale of 126,700 mt (5 mb) of corn to Mexico.
• USDA reported weekly export inspections at 876,000 mt (34.5 MB) for the week ending January 11.  Total inspection has reached 548 mb, up 29% year over year, the USDA is forecasting a 26% jump.
• Managed funds are staying aggressively short the market and growing this position. On last week’s Commitment of Traders eport, funds were short 230,723 net contracts of corn. The position is likely to be larger after the strong selling pressure to end the week.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher with support from higher soybean meal and a record-breaking NOPA crush report. Last week’s trade was rough with March soybeans losing 32 cents after a bearish WASDE report on Friday, but they ended the week significantly off their report lows.
• The biggest story in soybeans today was the NOPA crush report that showed 195.33 million bushels of soybeans crushed in December, which was well above the average trade guess and a record for any month. The crush was up 10% year over year and up 5% from the prior December high.
• While soybean meal saw higher trade following the NOPA report, soybean oil moved lower. Soybean oil stocks were pegged at 1.36 billion pounds, which was above the average trade guess of 1.291 billion pounds, but stocks were still down 24% year over year.
• The USDA reported weekly export inspections at 1.264 mmt (46.4 mb) for the week ending January 11.  Total inspections have reached 940 mb, down 21% year over year. The USDA is forecasting a 12% drop.
• The highlights of Friday’s WASDE report were an unexpected increase in US soybean yields for 23/24 and a decline in Brazilian production that was much smaller than expected or is likely realistic. The USDA currently estimates Brazilian soy production at 157 mmt which is down from their last guess of 161 mmt, but most analysts are guessing that number is closer to 150, and some are even in the low 140’s due to the early drought and heat.

WHEAT HIGHLIGHTS:

• All three US wheats finished with losses; both Chicago and KC wheat showed double digit losses. Weakness stemmed from a sharply higher US Dollar Index, which actually gapped higher today. As of this writing, it is up 0.99 at 103.40. This higher dollar should make US exports less competitive, which is not helped by the fact that the USDA increased their estimate of Russian and Ukrainian exports last week.
• The USDA reported weekly wheat inspections at 8.6 mb, which brings the 23/24 total inspections to 381 mb. That is below the pace needed to meet the USDA’s goal and is also down 16% from last year. On Friday, the USDA left their estimate of 23/24 wheat exports unchanged at 725 mb.
• Although they have not made any changes to the export ban on wheat, they did suggest that they have a better than expected wheat crop. Said to be around 114 mmt, this is above the USDA’s projection, and may indicate that they will not need to import wheat this year. If true, this could add to the bearish tone in the market.
• Over the past three weeks, 1.3 mmt of ag goods on ocean vessels are said to have been rerouted to avoid traveling through the Suez Canal and Red Sea region. Ships want to avoid conflict in that area, but this is also resulting in increased global freight costs. Reportedly, an average of 80 mmt of grain passes through the Red Sea every year with just over a third of that going to China.
• According to Ukraine’s agriculture ministry, 2.1 mmt of grain has been exported so far this month, up from 1.7 mmt last year. While no explanation was offered regarding the monthly increase, it should be noted that their total grain exports are down from last year since the season began July 1. The total so far is 20.6 mmt versus 24.5 mmt last year and of that total, 8.2 mmt is wheat.

DAIRY HIGHLIGHTS:

• US milk futures traded in the green this morning following yet another up auction for the GDT. The overall GDT index added 2.30% to its best close since February 2023.
• Class III futures couldn’t sustain the morning momentum, however, as cheese block sellers got aggressive in the US spot trade. A total of 7 loads traded hands and pushed the block price down 4.75c to $1.5150/lb.
• The barrel cheese price did have a nice day, however, catching a 2.50c higher bid to $1.47/lb on 8 loads traded.
• Nearby Class III contracts were down double digits with the second month falling 17c to $15.73.
• Class IV closed mostly green as the US powder price added a penny to $1.1950/lb.

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Author

Brandon Doherty