CORN HIGHLIGHTS:
- Corn prices finished the day lower after making 8-month highs early on. Improved weather patterns in South America weighed on the market, contributing to the late-session pullback.
- The USDA announced a private export sale of 136,000 MT of corn to unknown destinations for 2024/25 delivery. While this news supported prices early in the session, the market ultimately faded by the close.
- S&P global raised their 2025 corn acre forecast to 93.5 mmt. This is up 700,000 acres from their forecast in December and nearly 3 million acres more than 2024.
- The corn market treads in overbought territory with funds now estimated to be long over 320,000 contracts. Many feel it would take worsening conditions in South America to sustain rallies above the $5.00 level.
- Weekly ethanol production data has been delayed until Thursday morning due to Monday’s holiday.
SOYBEAN HIGHLIGHTS:
- Soybeans ended the day lower, taking back a portion of yesterday’s impressive gains. Yesterday’s rally was fueled by a sharp drop in the dollar, wet Brazilian harvest conditions, and an issue with grain shipments from Brazil to China. Today was likely a technical pullback that was accelerated by lower soybean oil while soybean meal ended higher.
- Yesterday, it was reported that Brazilian shipments of soybeans were suspended by China after 5 different Chinese firms found that the shipments did not meet phytosanitary requirements. There were concerns after some cargoes were found with chemical contamination, pests, or insects.
- President Trump has indicated that tariffs were coming for Canada and Mexico on February 1, and today it was reported that a 10% tariff on all Chinese imports would be put in place on the 1st as well. While this was expected, the Chinese stock market fell, and exports of soybeans could be affected due to retaliations.
- Weather in South America remains mixed: Argentina continues to see necessary rain, while persistent rainfall in Brazil is delaying the harvest and raising potential quality concerns. Brazilian soybeans were planted late, however, so a later harvest would be expected.
WHEAT HIGHLIGHTS:
- Wheat joined corn and soybeans in posting losses, with the Chicago contract leading the decline. Factors contributing to the weaker trade included profit-taking, a lower close for Matif wheat, and uncertainty surrounding potential tariffs and sanctions.
- S&P Global increased their 2025 total acreage forecast by 1.1 million to 47.1 million acres. Their winter wheat projection in particular stands at 34.115 million acres, which is in line with the most recent USDA estimate.
- SovEcon left their estimate of 2025 Russian wheat production steady at 78.7 mmt, which would be the lowest since 2021. With that said, if a significant cold spell occurs, minimal snow cover means that winterkill could be an issue that reduces overall production.
- According to the GASC vice chairman, Egypt intends to import between 5-6 mmt of wheat during the 24/25 season for their subsidized bread program. Total season imports are anticipated at 12.5 mmt; Egypt is one of the top global importers of wheat.
DAIRY HIGHLIGHTS:
- Class III futures experienced a decline today, with the February contract dropping 46 cents to settle at $18.97, while the March contract fell 29 cents to close at $19.01.
- Spot cheese was down again today, loosing 2.25 cents to close at $1.7925/lb. Spot whey also closed down, loosing 3.75 cents to close at $0.700/lb.
- Class IV milk saw limited trading volume today, with the March contract closing down 4 cents at $20.45.
- Spot butter lost 1.25 cents at close to end the day at $2.5225/lb. Spot powder gained 0.50 cents to close up at $1.3525.
Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.