CORN HIGHLIGHTS:
- Corn prices ended the trading day higher, driven by growing concerns over the heat and dry weather in South America and tariff delays.
- Recent rainfall in Argentina’s primary growing region has not alleviated concerns about the ongoing drought, which threatens to harm yields. After nearly a month-long drought and recent heatwaves in the area, some analysts argue that the rain arrived too late to reverse the damage caused by the drought. Last week, the 24/25 corn crop was cut to 48 mmt (1.89 bb) by the Buenos Aries Grain Exchange, due to adverse weather conditions, this is down from the 50 mmt it previously estimated.
- Weekly export inspections for corn totaled 61 mb, surpassing the 51 mb needed to meet the USDA’s forecast of 2.450 bb. Year-to-date, corn exports stand at 758 mb, up 31% from the same period last year. The top destinations were Japan with 18 mb, Mexico with 13 mb, and South Korea with 11 mb.
- AgRural estimates that Brazil’s second corn crop is less than 1% planted, a significant decrease from the 5% average for this time of year.
SOYBEAN HIGHLIGHTS:
- Soybeans ended the day sharply higher, taking out the recent high from the 14th in the March contract. The dollar was significantly lower which supported all of the grains today, but rain that is delaying the Brazilian harvest was supportive as well. Soybean meal led the complex higher with a gain of $13.80 in March, while bean oil was only slightly higher.
- Weather in South America remains mixed: Argentina saw weekend rain, while persistent rainfall in Brazil is delaying the harvest and raising potential quality concerns.
- With President Trump officially in office, trade was likely expecting tariffs to be ordered yesterday along with the slew of executive orders. While that was not completed yesterday, it is expected to go into effect on February 1 which could pressure markets.
- Friday’s CFTC report showed funds as buyers of soybeans by 63,445 contracts, which left them with a net long position of 34,833 contracts. Funds are nowhere near record long and have the ability to continue buying if weather remains a concern.
WHEAT HIGHLIGHTS:
- Wheat closed higher, led by Kansas City futures. A cold snap in the central U.S., minimal snow cover, a weaker U.S. dollar, and fund short-covering boosted prices.
- Weekly wheat inspections at 9.6 mb bring the total 24/25 inspections figure to 488 mb, which is up 24% from last year. Inspections are running above the USDA’s estimated pace; exports are estimated at 850 mb for 24/25, which would be up 20% from the year prior.
- According to Chinese customs data, December wheat imports totaled 150,000 metric tons, down 74.5% year-over-year. Year-to-date imports of 11.18 million metric tons are down 7.6% from last year.
- Russia exported $87.3 million in wheat to China in 2024, a 2.5x increase from 2023’s $34.7 million. Australia remained the top supplier with $1.08 billion in exports.
- The new military-run state buyer for Egypt is rumored to have purchased a significant volume of wheat directly from Russia. While this has not yet been confirmed, there is also talk that four Egyptian ships have been sent to Russia for loading, with a combined capacity of 250,000 mt.
DAIRY HIGHLIGHTS:
- Class III milk futures were sharply lower on the day due to a weak spot trade and reports that tariffs for Mexico and Canada could start as soon as February 1st. The February contract traded limit down to close at $19.43.
- Spot cheese was down 7.50 cents on the day to close at $1.8150/lb while whey went unchanged at $0.7375/lb.
- Class IV milk futures were also in the red today. July futures saw the largest loss at 24 cents to close at $20.35.
- Spot butter improved half a cent to $2.5350/lb while powder closed 2.50 cents lower to $1.3475/lb.
- Today’s Global Dairy Trade auction improved 1.40% to close at 2,218 points. Cheese, butter, skim milk powder, and whole milk powder all saw gains on the auction.
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