CORN HIGHLIGHTS:
- Corn futures traded higher for the second consecutive session as money flowed into the buy side of the grain markets on Tuesday. Strong buying through the session in the soybean market, and bull spreading in the corn market helped provide direction for the day.
- The Gulf cash basis remains strong as exporters are looking for fresh corn and soybean supplies for the export market. The strong basis has been trickling into some local basis bids as the market is trying to move corn supplies. This is not a typical pricing action in heavy supply years, but the speed of harvest may have limited some grain flows.
- Corn harvest is maintaining its rapid pace. On Monday’s USDA Crop Progress report, national corn harvest was 65% complete. This was above market expectations, up 10% from last year’s pace and 13% above the 5-year average. With the recent dry weather, this is the fastest corn harvest since 2012.
- Mexico stepped back into the US corn export market overnight, with the USDA reporting a flash sale of 359,500 mt (14.2 mb) for the 24/25 market year. Since October 16, Mexico has purchased 1.77 mmt (69.7 mb) of US corn.
- Brazil’s first corn crop is 48% planted, according to the analyst firm AgRural. This first corn crop is primarily intended for domestic use rather than export. However, a slow soybean planting pace could limit the key safrinha (second) corn crop. Later planting dates for the second crop could push it past critical weather windows, potentially extending the export window for available US supplies.
SOYBEAN HIGHLIGHTS:
- Soybeans ended the day higher for the second consecutive day with support from sharply higher soybean oil. The Chinese economic stimulus plan may be lending some support to soybean futures as trade hopes for stronger exports, and harvest is nearing completion in the US. Soybean meal was weaker today with a lower close.
- Yesterday’s Crop Progress report showed that the US soybean crop is now 81% harvested, which is the fastest pace at this time of year since 2010. This compares to 67% a week ago and the 5-year average of 67%. As harvest progresses, there have been some concerns regarding yields in the drier areas of the Corn Belt.
- In Brazil, 18% of the soybean crop is now planted which compares to 8% last week, and 30% the previous year. The majority of the country received rain last week and this week’s forecast has central Brazil receiving between 1 and 4 inches. The country has had a rocky start to the season with extremely dry conditions but has been recovering.
- In Indonesia, the government has stated they would raise the biofuel mix to 40% and plan to increase palm oil production to keep up with demand. Eventually, the country plans to raise the palm-based biodiesel mix to 50%. The country’s palm oil exports have also risen in August to 2.385m tons from 2.241m in July.
WHEAT HIGHLIGHTS:
- Despite minor losses in Paris milling wheat, all three wheat classes recovered from earlier losses to settle in the green after trading below their respective December contracts’ 50-day moving averages and likely finding buying support from reduced Russian wheat crop projections.
- The USDA’s weekly crop progress report indicated that 73% of the winter wheat crop is planted as of Sunday, Oct. 20, behind the 5-year average of 76% and the average trade estimate of 77%.
- The ag consultancy group IKAR issued its first projection for Russia’s 2025 wheat crop, estimating it between 80 and 85 million metric tons. Similarly, the other major Russian ag consultancy SovEcon estimates production at 80.1 mmt. If realized, this would be the smallest Russian crop since the 21/22 season. The reduced projections are largely due to recent dry conditions that delayed planting.
- In the past 24 hours, moderate rains have provided limited relief to dry areas in central Kansas and southeastern Nebraska, though more rainfall is still needed. Meanwhile, parts of Russia, eastern Ukraine, and western Kazakhstan are also expected to receive light showers, but not enough to significantly alleviate drought conditions.
DAIRY HIGHLIGHTS:
- Spot cheese was lower again today, dropping 5 cents to move to $1.90/lb. Spot whey was unchanged on seven trades.
- This had Class III futures on the defensive with November down 54 cents and December dropping 64 cents.
- The Class IV spot trade was on edge today as well, with spot butter down 5.25 cents and powder down 2.75 cents.
- The November 2024 through April 2025 Class IV futures were down 5 to 30 cents with some decent volume. December, like its Class III counterpart, was hit hardest.
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