CORN HIGHLIGHTS:
- A higher-than-expected corn yield and ending stocks total on Friday’s USDA report limited corn futures on the session. For the week, Dec corn futures lost 9 cents as the market will now stay focused on harvest progress and the South American weather forecast in the weeks ahead.
- The USDA Crop Production report showed a slight increase in corn yield for this fall to 183.8 Bu/A, up 0.2 of a bushel from last month. Most of the strength in the yield came from the central and western corn belt, offsetting the dry conditions in the eastern corn belt. This put total production at 15.203 billion bushels, up slightly from last month
- On the demand side of the table, the USDA raise 2024-25 corn exports by 25 mb from their September forecast. The combination of yield and higher demand, and the lower-than-expected grain stock lowered carryout to 1.999 billion bushels. This was 37 mb above the market expectation and weighed on prices.
- The USDA announced a flash sale of corn overnight. Unknown destinations purchased 577,928 MT (22.8 mb) of corn for the current marketing year. Expectations this was a sale to Mexico, who typically steps into the U.S. corn market more heavily during the harvest window to secure supplies.
- Harvest will likely stay at a strong pace through the weekend as midwestern weather forecasts remain dry into next week. Harvest was 30% complete last week, but that is expected to jump as producers are finishing soybean harvest and move over to corn. Hedging pressure will likely limit prices in the corn market.
SOYBEAN HIGHLIGHTS:
- With the exception of the November contract, soybeans posted double-digit losses for the session. Today’s WASDE report was relatively neutral for beans, so after the data was released, the market may have gone back to trading South American weather. The forecast continues to show better chances for rain in some of the dry central areas of Brazil next week. However, the USDA did leave both Argentina and Brazil production unchanged at 48.1 and 153 mmt respectively.
- On today’s report, the USDA lowered the soybean yield just slightly, from 53.2 to 52.1 bpa. Production also dropped a bit, from 4.586 bb to 4.582 bb. Harvested acreage was kept unchanged at 86.3 million and US 24/25 ending stocks were also in line with last month at 550 mb. As far as global numbers are concerned, the 23/24 carryout increased from 112.3 mmt to 112.4 mmt while 24/25 ending stocks were also bumped slightly from 134.6 mmt to 134.7 mmt.
- Though crude oil attempted to rally back to positive territory earlier in the session, as of writing crude futures are about 20 to 40 cents lower per barrel. The initial comeback off the session low was supportive to bean oil and the grain complex, but if it continues to fade lower it may offer resistance instead.
- USDA announced another flash sale of soybean before the day session on Friday. Unknown destinations purchased 132,000 MT (4.85 mb) for the 2024-25 marketing year. Soybean export demand for the marketing year has started at a good pace. This was the 13th published soybean sale since the marketing year began on September 1.
WHEAT HIGHLIGHTS:
- Wheat posted modest losses in all three US futures classes, alongside a lower close for Matif wheat futures. US wheat has been a follower of Paris milling wheat, so this may account for some of today’s weakness, especially given the fact that the WASDE report was mostly neutral. And despite the lower close today, further tensions in the Black Sea region may continue to offer support to the complex.
- On today’s report US 24/25 wheat carryout came in at 812 mb, down from the average trade guess of 821 mb and the September figure of 828 mb. In addition, global 23/24 wheat carryout was pegged at 266.2 mmt, compared with 265.3 mmt last month. For 24/25 world wheat ending stocks were estimated at 257.7 mmt versus 257.2 mmt in September.
- In addition to the above data, US wheat exports were kept unchanged today at 825 mb. Harvested acreage was increased from 37.9 to 38.5 million. Globally, Russian wheat production declined 1 mmt from the September estimate to 82 mmt, but Ukraine production slightly increased from 22.3 mmt to 22.9 mmt. Production estimates for Argentina and Australia were unchanged at 18 mmt and 32 mmt respectively.
- Today traders also received PPI data, which indicated that producer prices were unchanged compared to last month, while most were looking for a 0.1% increase. This has the US Dollar Index down slightly; if it now begins to trend lower, that would be supportive to wheat prices.
- SovEcon also released an estimate of Russian wheat production this morning. They now project it at 81.5 mmt, which is down 1.4 mmt from their last estimate. As stated above, the USDA is now at 82 mmt. In addition to this, the Russian ag minister was said to have met with major grain exporting companies today, likely to discuss an export quota. Their ag ministry did reveal a 41% increase to their wheat export tax, now at 1,872 Rubles per mt. This may be in an effort to slow down their grain export sales.
DAIRY HIGHLIGHTS:
- Class III futures gave back Thursday’s gains on lower cheese trade. November futures lost 42 cents to close at $21.03.
- Spot cheese closed lower for the 15th time in 16 trading days to close at $1.88750/lb. Whey lost half a cent to $0.5950/lb.
- The Class IV futures followed suit, trading lower thanks to lower products trading.
- Spot butter lost 1.50 cents on 26 loads traded to close at $26250/lb. Powder was unchanged from yesterday at $1.3525/lb.
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