CORN HIGHLIGHTS:

• Strong selling in the crude oil market and the soybeans triggered some long liquidation in the corn market on Tuesday. December corn futures posted its lowest close in the past 6 days, and the chart looks challenged technically, which could bring additional negative money flow.
• The favorable midwestern weather has pushed corn harvest over the past week. On Monday’s Crop Progress report, corn harvest gained 9% to 30% complete. This was 3% above the 5-year average and below analysts’ expectations. The pace of corn harvest has been limited as producers focus on the soybean harvest.
• Talk of potential ceasefire negotiations between Hezbollah and Israel triggered strong selling in the crude oil market. November crude oil pushed 5% lower during the session, which pressured the overall commodity complex on Tuesday.
• The USDA will release the next Crop Production and Supply/Demand report on Friday morning. Expectations are for corn yield to decrease slightly to 183.5 bushels per acre, down 0.1 bushels from last month. With improved demand, and slightly lower potential production, corn carryout for the marketing year is looking to be lowered for the fourth consecutive month to just below the key psychological level of 2.000 billion bushels.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day significantly lower for the fifth consecutive day as pressure from rains in Brazil bring funds back to the market as sellers. US harvest pressure has been a bearish factor as well, but trade is likely more focused on Brazilian production. November futures traded down to the 50-day moving average but recovered slightly.
• Both soybean meal and oil ended the day lower, but soybean oil was down sharply as it followed crude oil which is currently down $3.25 per barrel. The decline in crude oil came after Hezbollah allegedly said that it would consider a ceasefire in Israel following months of intense fighting.
• Yesterday’s Crop Progress report showed that the good to excellent rating in soybeans fell 1 point from last week to 63% but was in line with the trade estimate. 90% of the crop is dropping leaves, compared to 91% a year ago, and 47% of the crop is now harvested.
• This morning, the USDA reported private export sales totaling 166,000 metric tons of soybeans for delivery to China during the 24/25 marketing year. This followed a sale yesterday to unknown destinations of 172,500 mt for the 24/25 marketing year.

WHEAT HIGHLIGHTS:

• Wheat managed to just squeeze out a positive close, rejecting pressure from sharply lower soybeans and energy prices. Another day of consolidation for the US Dollar Index, as well as a higher close for Matif wheat futures lent support to the US market. Tensions in the Black Sea do remain elevated, which could also account for today’s relative strength in wheat as there are reports of a second grain vessel that was targeted by Russian missiles yesterday.
• According to the USDA’s Crop Progress report, as of October 6, the US winter wheat crop was 51% planted. Both last year’s pace and the 5-year average come in just above that at 52%. Additionally, 25% of the crop is reported to be emerged, which is in line with both last year and the average as well.
• The EU’s Monitoring Agricultural Resources unit is estimating the 2024 Kazakhstan spring wheat crop at 16.7 mmt compared with 11.3 mmt a year ago. Mild temperatures and good rains led to excellent growing conditions. Additionally, Kazakhstan’s ag ministry is expecting a 25 mmt total grain harvest this marketing year, with exports estimated to hit 12 mmt.
• Ukraine’s grain exports have totaled 11.2 mmt since the export season began on July 1, up 56% year over year compared to 7.2 mmt during the same period last year. Of that total, 6.5 mmt is wheat, marking an 80% year over year increase. Additionally, Ukraine has reportedly planted 2.88 million hectares of winter grain, with 2.62 million hectares being wheat.

DAIRY HIGHLIGHTS:

• After falling five days in a row by a total of $1.88/cwt, November Class III milk caught an up day Tuesday, regaining 13c to $21.13.
• Pressure on the market came from the spot cheese trade, which closed red for the 13th day in a row.
• Block cheese fell 2c to $1.9275/lb while barrel cheese lost 5.25c to $1.88/lb. There were 5 loads traded in total, taking the block/barrel average down to $1.90375/lb.
• Spot butter saw more offering, closing at its lowest price since January 2024 at $2.6775/lb.
• Class IV futures were softer, despite some pretty high volume for those contracts. November fell 4c to $21.06 while December lost 6c to $20.96.

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Author

John Heinberg