CORN HIGHLIGHTS:

• Corn prices saw weak price action as futures broke support under the most recent trading range. December futures lost 3 ¾ cents but held the next level of support at 475 on the close. Corn prices remain pressured by the ongoing harvest, and the lack of fresh news overall to bring buying into the market.
• Weekly ethanol output rose to an 11-week high at 1.052 million barrels/day for the week ending October 27. This is up from last week and the multi-year average. Last week ethanol production used 101.7 mb of corn, up from last week, but slightly below last year’s levels. Ethanol stocks remain low at 21.0 million barrels. This was the lowest week for ethanol stocks since December 2021.
• Demand overall remains a concern in the corn market. The USDA will release weekly export sales on Thursday morning. Last week saw a jump in sales to 1.35 mmt for corn. The market will be watching to see if that stronger sales trend can continue.
• The weak price action and negative close will likely keep short sellers active in the corn market. The downside trend under the December contract points to a test of the fall low and possibly the 460 level if selling pressure continues.
• South American weather is forecasted to stay dry and hot for areas of Brazil, and parts 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 important in the weeks ahead. If soybean planting stays delayed, that could push planting of the key 2nd corn crop past the ideal weather window.

SOYBEAN HIGHLIGHTS:

• Soybeans traded either side of unchanged today but ultimately ended higher. There was early support from both soybean meal and oil, but both fell with soybean oil closing sharply lower due to a decline in crude oil that followed the Fed’s rate announcement.
• The Federal Reserve announced today that it would keep the federal funds rate unchanged at 5.25% to 5.50% but indicated that another rate hike could be implemented in December, but that they need to see how the economy performs in the meantime. Crude oil took a hit from this news which dragged soybean oil lower.
• NOPA crush numbers will be released later today with the average trade estimate at 175 mb. This would be above the 169 mb crushed in August, and also above the 167.6 mb a year ago. Crush margins have been very profitable lately and domestic demand has been firm.
• In South America, excessive rain in the southern region and dryness in the northern regions of Brazil have some analysts expecting that the final soybean crop will be closer to 150 mmt rather than the 163 mmt that the USDA has estimated. Lower South American production coupled with tight US ending stocks could give soybeans momentum to rally.

WHEAT HIGHLIGHTS:

• Both Chicago and Kansas City put some green on the board today, despite the rise in the US Dollar Index and lower corn futures. Whereas Minneapolis futures ended with a mixed close. The relative weakness of Minneapolis in today’s trade could be the result of spread action.
• Brazil continues to be too dry in the north and central areas, while the southern region has received too much rain and has had flooding issues. And though they received recent rains, the US ag attaché in Argentina is still predicting their wheat production to fall to 14.5 mmt.
• China has reportedly made purchases of 2 mmt of wheat from Australia, with another 2.5 mmt from France. Floods are said to have damaged about 20% of China’s wheat crop, and they may look to import more down the road.
• For this marketing year that began July 1st, as of October 27th the EU’s soft wheat exports are down 24% from last year, representing a decline from 12.6 to 9.6 mmt.
• According to their agriculture ministry, as of October 31st, Ukraine has planted 4.2 million hectares of winter grain. This includes 3.7 million hectares of wheat, a year-over-year increase of 6%.
• Russia’s wheat export duty has reportedly dropped 14%, as of November 1st, to 4,923.4 rubles per metric ton, down from 5,297.7 rubles. This could help Russia maintain their dominance in the world wheat market.

DAIRY HIGHLIGHTS:

• Spot barrels saw some positive action on the day, gaining 1.75 cents with blocks going unchanged at $1.6850/lb. Spot whey was unchanged at $0.3650/lb with no loads traded.
• Class III prices were mostly healthier with only Q2 contracts trading lower. Class III has been trying to hang in there despite poor cheese prices bringing the Class down. 
• Spot butter was softer, losing 13.75 cents on no loads traded to close at $3.1425/lb. Spot powder was unchanged at $1.1875/lb, still about a penny lower from Monday. 
• Class IV prices were mixed with Q4 ’23 gaining on the day, while the February contract lost 43 cents. The Class IV average currently sits at $19.51/cwt.

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Author

John Heinberg