CORN HIGHLIGHTS:

• Weak price action triggered by hedge pressure and technical selling weighed on corn futures during the session, despite overall commodity market strength on Thursday. December corn lost 5 cents and posted its lowest close since September 27, 2021.
• Weekly export sales for corn were within expectations but lackluster. The USDA reported new sales of 748,000 mt (29,5 mb) for the current marketing year. Mexico was the top buyer of US corn last week. Year-over-year, corn export sales are up 26%, but still behind the pace needed to reach USDA’s marketing year export targets.
• Ethanol margins should remain friendly and supportive of the corn market in the near term. Ethanol production has remained strong, but ethanol stocks are historically low. The combination should keep the ethanol processor active in the corn market, and in need of supply.
• 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 hot and dry 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 of more 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.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day firmly higher following good export sales and some analyst expectations that the national soybean yield may decrease. Crude oil gained over two dollars a barrel today which, along with gains in palm oil, supported soybean oil. Soybean meal was bear spread with the front months lower but deferred contracts higher.
• Soybean export sales have begun picking up with China as a more active buyer, and today’s export sales report showed increases of 37.1 mb for the 23/24 marketing year which was on the higher end of analyst expectations. Shipments were huge at 73.2 mb and much higher than the 32.6 mb needed on average to meet the USDA’s expectations.
• Today’s Fats and Oils report showed September soybean crush at 175 mb, in line with analysts’ expectations and the largest September crush on record. Soybean oil stocks were down 25% from a year ago, but soybean meal stocks were reportedly 18% higher than a year ago despite the export demand.
• 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:

• Wheat managed to make small gains in all three US classes. The US Dollar Index gapped lower after yesterday’s Fed comments indicated that interest rates would be kept unchanged. This may have eased some pressure on the wheat market, allowing for small, but welcomed gains in price. If the US dollar continues to trend lower, the export market may begin to pick up, providing more long-term support.
• The USDA reported export sales of 10.1 mb of wheat, bringing the 23/24 total to 417.5 mb, down 7% from last year. About 14.2 mb of wheat need to be shipped each week to meet the USDA’s export goal of 700 mb, but shipments last week of just 3.7 mb were well below that figure.
• Rumors continue to circulate that China is looking for US SRW wheat pricing out of the Gulf, and so far there has been no confirmation of any purchases. However, they have recently purchased a combined total of 4.5 mmt from France and Australia.
• There is renewed concern about grain flow out of Ukraine. Apparently, Russia has planted explosives along Black Sea shipping lanes. In addition, Ukraine has new export registration and license requirements that may slow down exports of wheat and corn.
• SovEcon reduced their estimate of Russian wheat exports to 48.8 mmt from 49.2 mmt previously. Reportedly, wheat export sales have significantly declined recently, and it may be tied, in part, to the government’s attempt to limit exports at these recent low levels. In addition, the Russian agriculture ministry is proposing a six-month ban on durum wheat exports from December 1 – May 31.

DAIRY HIGHLIGHTS:

• Spot cheese was mixed with blocks gaining 1.50 cents to close at $1.7000/lb, while barrels went unchanged at $1.6725/lb.
• Spot whey climbed 0.75 cents on 7 loads traded to close at Monday’s price of $0.3725/lb.
• Class III prices finally saw some positive action, gaining on all contract months,led by the December contract, which saw a 22-cent jump to close at $17.35/cwt.
• Spot butter can’t catch a break, losing another 2.25 cents to close at $3.1200/lb. Only 3 loads of butter have been traded so far this week and we’ve seen a drop of 18 cents from Monday’s close. Spot powder dropped a quarter of a cent to close at $1.1850/lb. 
• Class IV prices were mostly negative with only the March contract seeing a slight bump by 2 cents. The butter market continues to hamper Class IV futures from moving much higher.

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Author

Amanda Brill