- Corn futures saw some back and fill price action, testing support before closing softer on the session as corn futures traded 1-2 cents lower. The price action could be considered positive as the market held onto yesterday’s gains and closed in the top half of the daily trading range.
- The corn market continues to be supported by a slight uptick in demand news. Mexico has been a more active buyer of U.S. exportable corn, and ethanol margins remain strong. While the overall demand news is still disappointing, slight positive news has helped put a possible fall low in prices going into harvest.
- U.S. corn harvest is now 23% complete according to the USDA Crop Progress report from Monday afternoon. This is slightly ahead of the 5-year average of 21%. Harvest pressure will continue to limit rallies in the near term
- A strong cold front will be moving through the Midwest going into the weekend, bringing rain chances for later in the week, but also the possibility of the first frost of the season. With the corn crop at 87% mature, damage from a frost/freeze event should be minimal.
- Ethanol margins will likely stay sideways, but supportive in the short term. The stronger ethanol grind has supported the market. The weekly Ethanol Production and Stocks report will be released on Wednesday morning.
- Soybeans ultimately ended the day lower, but came back significantly from their early morning lows, in which the low from June 28 was tested, but rebounded higher from there. Both soybean meal and oil ended the day lower as well.
- Yesterday’s Crop Progress report likely added some bearish pressure today after good to excellent ratings were increased by 2% to 52%, above trade expectations. Harvest is now reportedly 23% complete, which compares with 12% a week ago, and above the 5-year average of 22%.
- China was a buyer of both soybeans and wheat today, but for soybeans, they purchased 265,000 metric tons for delivery during the 23/24 marketing year. Soybean exports have been increasing slowly, but are still far below a year ago.
- Adding more pressure to soybeans are the USDA August soybean crush estimates, which are at 171.6 million bushels, which would be an 11-month low. Crush margins have slipped recently weighing on soy prices, as there has been less of an incentive for processors to crush beans.
- Wheat continued the uptrend from yesterday, though with less enthusiasm. Chicago futures posted small gains out to September, but December contracts onward were neutral to negative at the close. The U.S. Dollar Index did make another new near-term high, which continues to pressure the market.
- According to the USDA in Monday’s Crop Progress report, 40% of the U.S. winter wheat crop is planted versus 26% last week, with 15% said to be emerged.
- Adding support to the market, the USDA reported this morning that private exporters reported sales totaling 220,000 mt of SRW wheat for delivery to China during the 23/24 marketing year.
- According to Interfax, as of September 21, Russia has exported 17.7 mmt of grain, with wheat shipments totaling 13.5 mmt. The total grain export number is said to be 1.6 times that of total exported the same time last year. Reportedly, Ukraine’s Ag. Ministry also increased their grain harvest estimate to 21.7 mmt due to better than expected yield results so far.
- Over the next several weeks, the wheat market has the potential to see a short covering rally with U.S. wheat becoming more competitive globally, and several countries at risk of lower production due to weather.
- The spot cheese block/barrel average appears to have found some support after the recent selloff. For the week, the price is up 3.125c after holding steady on Tuesday.
- Butter buyers took the market 8c higher to another new record high of $3.42/lb. There was just 1 load traded.
- The Global Dairy Trade auction event on Tuesday was bid 4.40% higher, marking the third up auction in a row as the global market tries to come off of 5-year lows.
- October Class IV added 22c to $21.22 while November was up 17c to $20.67. October Class III fell 8c to $16.93 and November Class III added 5c to $17.33.
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.