CORN HIGHLIGHTS:

• Corn futures failed to find any traction to start the week as prices consolidated at the top of last week’s trading range.  Dec corm lost 3 ¼ cents to $4.90 on the session. The grain market lacked any true momentum to start the week.
• Weekly export inspections released by the USDA on Monday morning saw soft action last week at 435,000 mt (17.1 mb), which was below market expectations. Total inspections for the marketing year are at 155 mb, up 19% year-over-year, but still behind pace to reach the USDA target for the marketing year at 2.025 billion bushels.
• Demand news overall has helped support prices with an uptick in activity. USDA announced a flash sale of 200,000 mt (7.87 mb) to Mexico on the overnight, as Mexico has remained active in the corn export market with routine purchases.
• Despite end of week rainfall, US corn harvest is expected to move to 46% complete on the weekly USDA crop progress report. Weather forecasts give a window for some progress again early this week, but good rainfall over the weekend may limit some field activity.
• Harvest pressure still limits the corn market with less than 50% of the harvest completed. Potential rallies in the corn market are limited by producer selling.

SOYBEAN HIGHLIGHTS:

• Soybeans closed higher today after trading lower earlier in the day. Support came from the NOPA crush report which saw soybean oil stocks lower than expected. Export inspections today were supportive as well. Both soybean meal and oil finished the day higher.
• Weekly soybean inspections came in at an impressive 2,011,589 tons which was well above the high end of the trade guesses. This comes as a larger number of soybeans are getting shipped out of the PNW to China and other countries with Brazilian soybean supplies tight.
• Today’s NOPA crush report saw 165.456 million bushels of soybeans crushed in September, above the average trade guess of 161.683 mb and a new record for September. Soybean oil stocks came in at 1.108 billion pounds which is the lowest soybean oil stocks number since December 2014 and below the average trade guess.
• For the week ending October 10, non-commercial traders were sellers of 2,831 contracts of soybeans reducing their net long position to 2,170 contracts. In the wake of the bullish WASDE report last Thursday, it is more likely that those funds began buying and increased their net long position since the report which showed soybean yields at just 49.6 bpa and ending stocks at 220 mb.

WHEAT HIGHLIGHTS:

• Although it was a relatively quiet session, wheat closed mostly negative. This may be due in part to IKAR increasing their estimate of Russian grain production to 141.6 mmt. Despite this increase that should keep Russia competitive on exports, there are rumors that China is looking to potentially buy more US wheat after last week’s 181,000 mt purchase. China is expecting heavy rains over the next week or so in their grain regions, and this has the potential to affect their corn and wheat crops.
• Weekly wheat inspections of 13 mb bring the total 23/24 inspections to 248 mb. That is down 28% from last year, and so far, inspections are running behind the pace needed to meet the USDA’s export estimate of 700 mb.
• Argentina is already struggling with drought that will affect their crops, and as long as the Amazon basin stays dry, central Brazil should remain dry as well. While central and northern Brazil are experiencing dry conditions, southern Brazil remains too wet. Additionally, with Australia having their own drought problems, there is talk that in 2024, wheat stocks of the major exporting countries will be the lowest in 16 years, which should be bullish for the market.
• From a technical standpoint, even though December Chicago wheat has closed over the 21-day moving average for the second day since the end of July, significant resistance remains at the six dollar level. Aside from the negative influence of last week’s report, the uncertainty in the Middle East could also affect the wheat market as the conflict ramps up given that wheat is more of a staple in that part of the world.
• According to the Ukrainian government, since July, Russia has destroyed about 300,000 mt of grain during their attacks on port infrastructure and vessels.

DAIRY HIGHLIGHTS:

• Nearby Class III futures faced single-digit losses to start the week. The second month November contract fell 2 cents to $17.39.
• Spot cheese saw blocks unchanged and barrels down a quarter cent, closing at $1.67125/lb. Spot whey was unchanged on 12 trades.
• For Class IV futures, November dropped 8 cents while the December contract was up 2 cents. The rest of the contracts were unchanged.
• Spot powder was unchanged and remains in an uptrend, while spot butter added to last week’s losses with a penny lower close Monday.

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Author

Amanda Brill