CORN HIGHLIGHTS:

• An overall quiet day in the corn market as the Dec futures failed to push through resistance at 490 and closed the day down 1 ½ cents. A strong selloff in crude oil futures and harvest pressure limited the potential in the corn market on the session.
• The crude oil market traded over 5% lower during the sessions as the latest Energy Information Association report saw gasoline demand drop to the lowest levels since 1998 last week, striking demand fears into an overbought crude oil market.
• The corn market continues to be supported by a slight uptick in demand news. Mexico added a new flash sale of 196,000 mt of corn split between 23/24 and 24/25 marketing years, and ethanol grind remains strong as current corn usage for ethanol production is trending 5.5% greater than last year.
• The USDA will release weekly exports sales on Thursday morning. Corn is expected to show a strong week with new sales for the 23/24 marketing year to range from 1.4-2.0 mmt, and 24/25 marketing year sales to range from 650,000 mt to 750,000 mt. Most of these sales are known with last week’s reported purchases from Mexico.
• U.S. harvest was 23% complete last week, and pace should continue to be firm this week.  Harvest pressure will limit the corn markets as fresh supplies pressure the basis and the cash market.

SOYBEAN HIGHLIGHTS:

• Soybeans were a mixed bag today as they traded higher in the overnight session, but faded into the day. Then, they managed to close just slightly higher in the two front months, with the deferred contracts lower. Soybean meal ended the day higher and soybean oil lower on lower crude oil and palm oil prices.
• On the technical side, November soybeans found strong support at the previous June low of 1256 ¾ and moved higher. Soybeans are technically oversold and may have an opportunity to move higher. In addition, non-commercial traders have a net long position of just 30,058 contracts as of last week, which is relatively low for this time of year.
• Yesterday’s sale of 9.7 mb of soybeans to China during their Golden Week holiday was encouraging, but U.S. new crop bean sales are at just 16.2 mmt compared to 25.5 mmt last year. At this point, U.S. soybeans are now competitive with Brazil’s offers and should help U.S. exports.
• As the value of soy products has continued to decline over the past month, processors have lost some incentive to crush soybeans and yesterday’s Census Crush numbers for August revealed that only 169 mb of soybeans were crushed compared to trade estimates of 172 mb.

WHEAT HIGHLIGHTS:

• Rumors that Ukraine re-opened the Black Sea export corridor with Russian support had the wheat market under pressure today. As of this writing, it has not been confirmed, but the trade took notice, nonetheless. Also, two additional ships were confirmed heading toward Ukrainian ports, and 12 vessels are said to be waiting to load.
• While Russian wheat offers are still beating out the U.S., China’s surprise purchase of SRW wheat yesterday signifies that U.S. wheat is becoming more competitive. However, the fact that the U.S. dollar is still at an 11 month high, and still in an uptrend, could continue to weigh on U.S. exports.
• On the bullish side, heavy rains in parts of Brazil may cause concerns for their wheat crop. Additionally, the dryness in wheat growing areas of Australia and Argentina could reduce their production down the road. In any case, more friendly news may be needed to sustain buying interest.
• According to Ukraine’s Agriculture ministry, planting of winter grain has reached 2.99 million hectares as of October 3rd. Of that total, 1.7 million ha is winter wheat, which represents a 58% increase when compared to last year.
• According to SovEcon, as Russian wheat exports increase, on farm stocks have been falling from their record highs. They also estimated that Russian wheat exports will be 2 mmt above the previous year at 48.9 mmt.

DAIRY HIGHLIGHTS:

• The November Class III contract was down 26 cents to $17.07 on its first day as the second month contract. October fell to $16.76.
• While spot cheddar barrels were unchanged today, cheddar blocks fell 4 cents to $1.61125/lb.
• Class IV futures were mostly higher on light volume. The November contract garnered 8 cents to push to $20.75.
• Spot butter gained another penny to push to another all-time high of $3.43/lb while powder fell a half cent.
• September Class III futures settled at $18.39, while Class IV finished at $19.09. Those are up $1.20 and $0.18 cwt from last month, respectively.

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Author

John Heinberg