CORN HIGHLIGHTS:

• The weak price action theme continued to pressure the corn market on Thursday. Harvest pressure outweighed positive export sale numbers as December corn lost 3/4 cent on the session and traded lower for the fifth consecutive session.
• The USDA released a strong weekly export sales report for corn on Thursday morning. Last week, U.S. exporters added 1,351,100 MT (53.2 mb) of sales on the books for the 2023-24 marketing year.  Shipments were disappointing at 483,700 MT (19.0 mb), but this is typically a window dominated by soybean exports. Corn sales commitments now total 690 mb in 2023-24 and are up 24% from a year ago and slightly ahead of the pace needed to reach the USDA export target.
• South American weather is forecasted to stay dry and hot for areas of Brazil, and areas of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, the corn market is lacking any true weather premium.
• The cash market will likely give direction to the futures market. Basis has improved and should stay supported as rain/snow moves across the Corn Belt through the weekend, slowing harvest. Corn harvest was 59% complete last week.
• Managed money funds still hold a large short position in the corn market, short last week a net 108,870 contracts. News has been quiet to push funds out of their short positions as harvest ramps up, and U.S. corn supplies are looking to be at multi-year highs.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower despite strong export sales, a new sale reported today, and dryness in South America. Pressure came from lower soy products with soybean oil lower, along with lower crude and other veg oils, and soybean meal down slightly for the day in the deferred contracts.
• Soybean export sales were impressive for the week ending October 19, with the USDA reporting an increase of 50.6 mb in sales for 23/24. Export shipments of 87.6 mb were well above the 33.8 mb needed each week to meet the USDA’s expectations. Primary destinations were to China, Mexico, and Bangladesh.
• This morning, private exporters reported sales of 110,000 metric tons of soybeans for delivery to China during the 23/24 marketing year. This has been the continuation of a string of sales to China as soybeans out of the PNW get more competitive with the stores South America has left. Exports of soybean meal have also been strong as the US picks up business from Argentina.
• Something that could have pressured the soy complex today is reports of falling spot prices of soybeans in Brazil. This has caused producers to become much more reluctant sellers as profit margins get tight, while weather forecasts remain dry, causing producers to worry.

WHEAT HIGHLIGHTS:

• In the face of a higher US dollar and lower corn and soybeans, wheat rallied today. This is likely due, in part, to news that Ukraine has temporarily suspended their humanitarian corridor due to Russian threats. It is currently unclear as to how long the route will be closed, but in any case, Ukrainian grain shipments are down about 30% from last year, despite about 40 cargoes of grain making their way out of the country via Ukraine’s corridor.
• Export sales for wheat were lackluster at 13.4 mb for the 23/24 and 0.6 mb for 24/25. With the USDA estimating 700 mb of 23/24 wheat exports, the shipments last week of just 4.8 mb were well below the 13.9 mb pace needed per week to meet that goal.
• With funds holding over 100,000 short contracts of Chi wheat, and futures reaching support at these lower levels, part of today’s rally could be technical in nature as the market corrects to the upside. However, the export market will likely need to pick up before wheat sees a strong move higher.
• According to their agricultural ministry, Russia is expecting a total grain harvest of 140 mmt. That would represent the second largest production on record, with the wheat crop accounting for 93 mmt of that total. For reference, previous estimates were pegged at a 135 mmt total crop, with 90 mmt of that being wheat.

DAIRY HIGHLIGHTS:

• Spot cheese was mixed with blocks going unchanged while barrels lost another 1.75 cents on 3 loads traded. Spot whey looked good, gaining 2.75 cents, and helping support cheese and Class III futures.
• Class III futures showed some life early in the session trading higher on Q1 contracts only to lose steam and close slightly below unchanged. December futures, however, gained 4 cents on the day closing at $17.42/cwt. 
• Spot butter continues to draw down losing 5 cents on the day with a total of a 12.50 cent loss so far this week. The spot powder market followed butter lower losing 1.25 cents to close at $1.1975/lb.
• Class IV was weaker on poor spot trading closing at $20.60/cwt on November futures. This now makes Class IV down over $1/cwt on the last two sessions.

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Author

John Heinberg