CORN HIGHLIGHTS:

• Corn prices finished the session lower on Thursday due to hedge pressure and likely position squaring before Friday’s USDA WASDE Report. It was a difficult close technically as prices failed to hold early session strength and closed under the 420 level on the Dec contract. This could trigger additional selling going into the evening session.
• USDA will release the October Crop Production and Supply/Demand report on Friday morning at 11:00 CST. 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, with the average trade guess at 1.988 billion bushels.
• The market will be focused on the demand side of the balance sheet for corn to see if USDA will make adjustments. Export demand and ethanol usage are off to a strong start in the marketing year. The marketing year is only a few weeks old (starting on Sept 1) but increases in demand and moving carryout projection under 2.000 billion could give the market a psychological boost, even though stocks are still at 4-year highs.
• The weekly export sales report was within expectations on Thursday morning. As of October 3, new export sales totaled 1.222 MMT (48.1 mb). Mexico continued to be the top buyer of US corn. Total corn sales are now at 695 mb, up 15% over last year and the fifth best set of sales for this time in the last 10 years.
• Brazilian and Argentina corn prices have been climbing in recent sessions, due to lack of farmer selling and an overall tighter supply picture in South America. The increase in prices should help keep US prices supported in the spring months, boosting our possible export figures.

SOYBEAN HIGHLIGHTS:

• The soybean complex closed the day mixed with soybeans settling lower as they came under pressure from seventh consecutive day of lower prices in meal, improved planting conditions in Brazil, which is seeing increased rain activity, and continued harvest pressure from the quick US harvest pace.
• In today’s weekly export sales report, the USDA reported 46.45 million bushels of new sales for the 24/25 marketing year in the week ending October 3. This brings total commitments to 740 mb, up 4% versus last year, but behind the USDA’s forecast of a 9% increase. The primary destination was China with 21.4 mb, of which 8.1 mb were switched from unknown destinations.
• Tomorrow, the USDA will release the next WASDE report with updated production and supply/demand information. Expectations are for soybean yield to remain mostly steady from last month at 53.2 bushels per acre, with carryout for the current 24/25 marketing year expected to be lowered slightly to 546 million bushels.
• Weather conditions across the Midwest are expected to remain dry with above normal temperatures, which should allow harvest to continue at a good clip. The quick harvest pace may continue to limit rally potential with hedge pressure as bushels are sold across the scales.

WHEAT HIGHLIGHTS:

• US wheat futures closed higher again today across the board, alongside a higher close for Matif wheat futures. After the grain close the US Dollar is about unchanged but has traded both sides of neutral today; wheat remained relatively steady through the session despite the fact that the Dollar did break back above 103. Traders’ focus may still be on Black Sea tensions, with reports that a Russian missile attack yesterday against Ukrainian port infrastructure in Odessa killed six people and injured eight others.
• The USDA reported an increase of 15.9 mb of wheat export sales for 24/25 and an increase of 0.2 mb for 25/26. Shipments last week at 13.2 mb fell below the 14.9 mb pace needed per week to reach the USDA’s export goal of 825 mb. Total sales commitments have reached 443 mb, which is up 19% from last year.
• Pre-report estimates for tomorrow’s WASDE report look relatively neutral, if not slightly supportive for wheat. The average guess for US 24/25 carryout comes in at 821 mb, which would be down from 828 mb in September. As far as world numbers are concerned, 23/24 wheat ending stocks are projected at 265.0 mmt vs 265.3 mmt last month, while 24/25 ending stocks are estimated to come in at 256.4 mmt vs 257.2 mmt in September.
• The Rosario Grain Exchange is said to have lowered their estimate of Argentina’s wheat production by 1 mmt to 19.5 mmt due to dryness. For reference, this is still above the USDA’s figure of 18 mmt. While Argentina has received some recent rainfall, it may be too little too late for the wheat crop.
• According to the USDA as of October 8, about 47% of US winter wheat acres are experiencing drought conditions. This is up from 44% the week prior. In addition, spring wheat areas saw an increase from 22% to 29% for the same time period.

DAIRY HIGHLIGHTS:

• Spot cheese closed lower for the 14th time in 15 trading days with a $1.8975/lb settlement. Whey was unchanged again.
• Despite this, all Class III futures closed with grains ranging from a few cents to 30 cents on the second month November contract.
• The Class IV contracts were mixed again, but November gained 12 cents to move to $21.18.
• Spot butter closed down a penny on a whopping 30 loads traded, entering Friday down 4.75 cents on the week. Powder gave back a quarter-cent.

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Author

John Heinberg