CORN HIGHLIGHTS:

• Another sideways day of trade in the corn market as December futures gained ½ cent on the session.  The Dec contract had a 5 ½ cent trading range on the day, trading within this narrow range for the 5th consecutive day as the market lacks fresh news.
• Corn harvest has moved to 71% complete as stated in the USDA Crop Progress report. This was slightly higher than market expectations and 5% above the 5-year average of 66%.
• 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, weather will grow more in importance in the weeks ahead. If soybean planting stays delayed, that could push planting of the key 2nd corn crop past the ideal weather window.
• The lack of fresh news and ongoing harvest pressure will likely keep the path of least resistance lower in the corn market unless some more friendly news were to develop in the near term
• Last week, managed money funds were reported as net short 100,430 corn contracts, reducing their short positions by 8,440 contracts. Global and US corn supplies are still heavy, and funds will still need a reason to exit those remaining short positions, which is lacking at this time.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day slightly higher after a volatile day in which they opened lower overnight, gained as much as 15 cents in the November contract near midday, then faded into the close. Support came from higher soybean meal while soybean oil was lower along with lower crude and palm oil.
• Yesterday evening’s Crop Progress report showed that the soybean harvest is ahead of the normal pace at 85% complete. The 5-year average is 78%, and Illinois and Iowa are both far ahead of the average pace at 89% and 93% complete respectively.
• Today, private exporters reported sales of 239,492 metric tons of soybeans for delivery to Mexico during the 23/24 marketing year. This comes after multiple sales to China last week and impressive export inspections on Monday.
• In South America, planting is pressing on as chances for rain in central Brazil and Argentina improve slightly, but southern Brazil remains too wet. Argentina’s soybean production will very likely be much higher than last year’s drought ridden crop which will eventually impact the large US exports of soybean meal.

WHEAT HIGHLIGHTS:

• The wheat market continues to see a lack of new bullish headlines, and that is keeping it under pressure. All three US futures classes, alongside Paris futures, closed with losses on the day. There have been no major updates regarding the war in the Middle East or the Black Sea, but Russia does continue to offer cheap wheat for export, around $230 per metric ton, further undercutting US offers.
• Yesterday afternoon the USDA said 84% of the winter wheat crop is planted, down just 1% from average. And with emergence at 64% (in line with the average), the crop was rated 47% good to excellent. While this may be just slightly lower than what the trade was looking for, it is well above last year’s initial rating of 28% GTE. This can be attributed to improved soil moisture and easing drought in the southern Plains.
• The US Dollar Index was on the rise again today and is close to testing the 107 level again. This, along with yesterday’s poor inspections data, a good crop rating, and no fresh news, all combined to offer weakness to the market. The silver lining may be Chinese demand, as they are reportedly ready to import a record amount of wheat due to damage to their crop. Recently they have been making purchases from Australia and France.
• In Brazil, unfavorable weather has impacted the quality of their wheat crop. This has caused their internal prices to recently increase. Additionally, a fire that broke out at one of the key ports in Brazil is causing grain shipping delays. The port in Paranagua is Brazil’s second largest, and this just adds to the logistics issues they have been facing recently with low river water levels.

DAIRY HIGHLIGHTS:

• Milk futures were under duress again on Tuesday, as all four spot products were offered lower.
• The spot cheese block/barrel average hasn’t posted an up day in six sessions and currently sits at $1.67/lb. The low price is weighing on Class III futures. 
• January 2024 Class III milk hit its lowest price since March 31, 2022. That contract has fallen $1.53 per cwt in nine sessions. 
• Spot butter was down just 2c today to $3.28/lb, after gaining 10.75c yesterday. There were no loads traded on Tuesday.
• The US whey market is down 3.50c so far this week to $0.3650/lb.

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Author

Brandon Doherty