CORN HIGHLIGHTS:

• Today after a break just above the 100-day moving average (around 5.09) December corn settled back below the five-dollar level at the close. The grain markets as a whole saw reversals into negative territory to end the session. This is despite the continued dryness in Brazil, uncertainty on the war in Israel, and crude oil in an uptrend. After the recent move higher and above some resistance levels, a combination of profit taking, and stops being triggered could explain today’s decline.
• US corn harvest should be able to make some good progress over the next few days before potential delays next week as a storm system moves through. Nationally, harvest should surpass the halfway mark on Monday’s Crop Progress report.
• Rumors continue to circulate that China is looking to purchase US corn out of the PNW. Ukraine prices are more competitive, but logistical issues could cause China to turn to the US. The war in Ukraine, though largely old news, is still a factor in global trade. Last night, President Biden made an address and is looking for Congress to approve $105 billion in aid for both Ukraine and Israel.
• According to the Buenos Aires Grain Exchange, Argentina’s corn planted area as of October 19 will remain unchanged at 7.3 million hectares for 23/24. Additionally, 19.9% of the corn crop is planted, up 0.5% from last week.
• The International Grains Council lowered their 23/24 world grain stockpiles to 582 mmt, vs 588 mmt in September. Corn stocks were reduced from 289 mmt to 283 mmt in part due to a smaller production estimate.

SOYBEAN HIGHLIGHTS:

• Soybeans began the day higher but slipped throughout the day for a lower close. This was the second consecutive day that November soybeans reached the 100-day moving average without being able to move or close above it. Soybean meal ended the day lower and soybean oil was higher.
• Overall, news for soybeans over the course of this week was good between export inspections, crush numbers, export sales, and South American weather. For the week, Nov beans gained 22 cents, Dec meal gained 33.90, and Dec bean oil lost 0.99.
• Some analysts are estimating that Brazil will produce another massive soybean crop this year with guesses between 162-164 mmt, but so far, the weather has been too dry, causing planting to be delayed, and the overall weather pattern doesn’t offer much moisture at this point.
• In the US, this week has been mostly dry giving producers an opportunity to get a good chunk of harvest complete before more rains fall again in the coming week. Despite some reports of “better than expected” yields, a prominent crop scout has called the final bean yield at just 49.3 bpa, below the USDA’s last estimate of 49.6 bpa.

WHEAT HIGHLIGHTS:

• Despite strong gains earlier in the session, US wheat futures closed in negative territory across the board. Wheat was not alone, with lower closes in corn and soybeans too. This is despite a positive close in Paris milling wheat futures, as well as uncertainty over production in the southern hemisphere and any war premium that might be factored in.
• Brazil’s 23/24 wheat crop is now estimated at 10.5 mmt, which is 5.9% below the previous projection. This is attributed to continued dryness that seems to be getting worse. Some areas of the Amazon River are at the lowest levels in over a century, and if the Amazon basin remains dry, it will keep the central and northern parts of Brazil dry as well.
• Argentina is receiving some much-needed rains. However, the precipitation will not be a “drought buster” and more will be needed to help their crops. Currently, their wheat crop is rated 47% poor to very poor. That represents a 5% decline in condition since last week’s rating, according to the Buenos Aires Grain Exchange.
• Ukraine’s total grain exports are down 30% year on year as of October 20 (since the season began on July 1). That reflects 8 mmt exported vs 11.5 at the same time last year. Of that total, wheat exports of 4.1 mmt are down 6.7% year on year. But the majority of the decline is in exports of barley and corn, down 31% and 49% respectively.
• Australia has been dealing with extreme drought in some regions, likely to affect their final production. However, recent rainfall in some of the southern wheat growing areas may help stabilize the overall crop and even increase yields, despite the declines in the western part of the country. Some analysts are now looking for a 26 mmt Australian crop, vs estimates of 23 mmt just a few weeks ago. For reference, Australia’s 10-year average comes in at 26.4 mmt, and 2019 (a drought year) resulted in only a 14.5 mmt harvest.

DAIRY HIGHLIGHTS:

• Spot cheese fell slightly to $1.74875/lb on Friday mostly due to blocks falling 2.50 cents, while barrels traded a penny higher. Despite this, spot cheese hit its highest close this week since September 19th.
• Spot whey closed out the week strong by trading higher for the fourth day in a row climbing to $0.3950/lb.
• Class III futures took a step back on Friday with the January ’24 contract taking the biggest hit at 35 cents to close at $18.15/cwt.
• Cash butter prices fell for the third day in a row by 3.75 cents to $3.36/lb. The spot powder market remains relatively flat this week, going home at $1.2325/lb.
• Class IV futures were mostly uneventful on light volume. Only the November ’23 contract saw a loss of more than a penny at 13 cents to go home at $21.36/cwt.

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

Brandon Doherty