CORN HIGHLIGHTS:

• Traders used the strength in the wheat market and a faster-than-anticipated corn harvest to push corn futures slightly higher for the session. The market saw light bull spreading, with strength in the December contract versus deferred contracts.
• The USDA reported in Monday’s Crop Progress report that 81% of this year’s corn crop has been harvested. This was 1% above expectations and 17% above the 5-year average, as dry weather has allowed for rapid harvest progress.
• The corn market has been supported by an uptick in demand, with a series of export sales announcements and strong weekly totals. Although the daily run of export sales announcements ended today with no reported sale, the US corn export book at this time is the fourth best in the past decade.
• The rapid improvement in Brazil’s soybean planting pace, due to improved weather, has eased concerns about a delayed start for the key second-crop corn planting. Traders are now more confident the crop will still hit key weather windows.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower, as bear spreading pushed front-month contracts lower than deferred months. January futures are now just 5 ½ cents away from their contract low in August, with improved South American weather and planting activity pressuring prices. Soybean meal ended the day lower, while soybean oil was slightly higher.
• Yesterday’s Crop Progress report showed that the soybean harvest is now 89% complete, slightly below the average trade estimate of 91%. This compares to 81% complete last week and the 5-year average of 78%.
• Additional selling pressure today likely came from Brazil’s accelerated planting pace, which has now reached over 36%, up 18% from the previous week. Although drought previously delayed progress, planting is now only 4 points behind the pace at this time last year. The USDA estimates Brazilian production at 169 mmt, while CONAB’s estimate stands at 166 mmt.
• Export demand has been firm ahead of the election, as some countries are likely stocking up before potentially facing tariffs. Yesterday, it was rumored that China purchased between 4 and 6 cargoes of US soybeans and 1 cargo from Brazil for February delivery.

WHEAT HIGHLIGHTS:

• Wheat recovered today with double-digit gains in all three US classes. Strength stemmed from further consolidation in the US Dollar Index, a higher close for Matif wheat futures, and, perhaps most impactfully, US winter wheat crop ratings that came in below expectations.
• According to the USDA’s Crop Progress report, winter wheat was 80% planted as of October 27, compared with 82% last year, and 84% on average. Additionally, 56% of the crop has emerged, which falls below 61% for both last year and the average. Most importantly, the crop was rated just 38% good to excellent and 23% poor to very poor, reflecting worsening drought conditions in key growing areas. The trade had expected a GTE rating closer to 50%, and the actual figure remains well below last year’s 47% GTE rating.
• According to UkrAgroConsult, Ukraine exported 6.1 mmt of wheat during the July-September timeframe, nearly doubling the amount shipped over the same period last year. Including preliminary data from October, Ukraine has already shipped 50% of their total 24/25 export potential within just four months.
• In a statement by Egypt’s supply minister, Sherif Farouk, a Russian wheat shipment of 430,000 mt will be delayed from October to November; the deal was reached in September. He did not indicate why the shipment was delayed, and no other details were provided. Egypt is attempting to build its wheat stocks amid a struggling economy and a recent foreign currency crisis.

DAIRY HIGHLIGHTS:

• December Class III milk futures fell 16c to $19.94 on Tuesday. This marks the first close below $20.00 for December milk since August 9th.
• December milk saw a record number of contracts trade, with over 1,150 contracts changing hands.
• A 0.75c higher close in the block/barrel average cheese trade helped support November Class III, as it gained 9c to $20.22.
• The US powder market is pushing higher once again. The spot trade added 1.25c to $1.3875/lb on Tuesday.
• Spot butter found a rare up day, adding 1.50c and closing up to $2.69/lb.

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Author

John Heinberg