CORN HIGHLIGHTS:

• The corn market finished mixed to slightly higher in the front end of the market as December corn prices saw a small bounce after holding the key 400 support level. Strength in the wheat and soybean markets likely triggered some technical buying and short cover going into the end of the week. So far, going into Friday, December corn is 9 cents lower on the week.
• The 400 level on Dec corn has seemed to trigger some export demand. The USDA announced large purchases yesterday, and today posted two new export sales. Mexico added 197,180 mt (7.6 mb) and Unknown destinations added 101,000 mt (4.1 mb) in US export sales for the current marketing year.
• The USDA will release weekly export sales totals on Friday morning, delayed a day due to the Columbus Day holiday on Monday. Expectations are for new corn sales to range from 1.2 – 2.2 mmt. Last week, export sales were 1.222 mmt.
• Weekly ethanol production rebounded to 1.042 million barrels per day last week, in line with analysts’ expectations. A total of 105 million bushels of corn was used for ethanol production, keeping the pace needed to meet USDA usage targets by the end of the marketing year.
• Corn harvest will likely continue to move along at a steady pace as weather conditions remain favorable. The addition of new bushels in the pipeline will limit upside price potential in the corn market.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher after trading lower throughout most of the morning. When soybeans began to recover around midday, they were led higher by the November contract while the deferred contracts trailed behind. This narrowed the spread and could be pointing to traders rolling out of their November short positions for later months. Both soybean meal and oil ended the day higher.
• On Friday’s CFTC report, funds had reportedly slimmed down their net short position to just 21,000 contracts as of October 8. Since that day, they are estimated to have sold an additional 30,000 contracts which would leave them net short nearly 50,000 contracts at this point. When soybeans reached their lows in August, funds held a net short position of just over 175,000 contracts. If fundamentals continue to be bearish with a strong US harvest and good Brazilian weather, funds have the potential to take prices significantly lower.
• In China, the soybean harvest in the major producing area of Heihe is nearly finished and is expected to see a bumper harvest. While China has been a buyer of US soybeans recently, this could impact future business to a small degree. China remains reliant on Brazil and then the US for soybean imports.
• In Brazil, rain has fallen steadily over the past 7 days with more in the upcoming forecast. The central regions which contain the primary soybean producing states had previously been very dry but have gotten over 1 inch in most areas.

WHEAT HIGHLIGHTS:

• Wheat reversed from early losses to close mostly higher across all three classes. Once again, Matif wheat futures appeared to lead the US market, gaining another 1.25 to 2.50 euros per metric ton by today’s settlement. The grain complex as a whole also recovered, with higher closes across the board, including soybean products and oats. From a technical standpoint, most of these markets were at or near oversold levels, and wheat in particular bounced off support near the 40 and 50-day moving averages (as it did yesterday).
• Drought conditions in US wheat-growing regions continue to worsen. According to the USDA, as of October 15, an estimated 52% of winter wheat acres are experiencing drought, up from 47% the previous week. Additionally, drought in spring wheat areas increased from 29% to 32% during the same period. However, rains are forecasted for the US Southern Plains by this weekend, which should help replenish soil moisture in key winter wheat-growing regions.
• SovEcon reportedly reduced its Russian wheat production forecast to 81.5 mmt, down 1.4 mmt from the previous estimate. If accurate, this would mark the smallest harvest in four years. In related news, Russia will reportedly allow Kazakhstan to transport grain through Russia to other importers, though Russia itself will not permit imports.
• French soft wheat exports for the 24/25 season have been reduced to 10.025 mmt from 10.100 mmt previously, according to FranceAgriMer. The decline is said to be tied to a 61% drop in sales outside of the EU. Additionally, the estimated stockpiles were reduced from 2.75 to 2.50 mmt.

DAIRY HIGHLIGHTS:

• Class III futures were strong once again with the second month November contract closing 30 cents in the green at $21.46.
• The Q1 Class III average pushed to a new high close of $20.36, thanks to a push to new levels for both the February and March contracts.
• Spot cheese was up for a third straight day, closing at $1.9675 with barrels garnering 8 cents. Spot whey was unchanged.
• Class IV milk was unchanged to higher with the November through February contracts 8 to 20 cents higher.
• Spot butter gained 4.50 cents today to close at $2.68/lb while powder was up a penny to $1.36/lb.

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Author

John Heinberg