CORN HIGHLIGHTS:

• The USDA Crop Production report lacked very little bullish news, triggering additional selling in the corn market. December corn futures lost 8 cents and posted a new contract low and low daily close for the recent move. The weak price action will likely pressure the market into Friday’s trade.
• The USDA raised yield projections by 1.9 bushels/acre to 174.9 bushel/acre, which was above expectations. The increase in production added to the balance sheet, despite an increase in projected demand, and raised corn carryout to 2.156 billion bushels, up 45 mb from last month and above analysts’ expectations.
• An increase in demand was questioned by market analysts as the USDA added 50 mb to export demand, 25 mb to ethanol demand, and 50 mb to feed usage. The new export target for the marketing year is 2.075 billion bushels, a 400+ mb increase over last year.
• Weekly export sales were within expectations for corn in the USDA Export sales report. Last week, new sales for the marketing year totaled 1.015 mmt (40.0 mb), within analysts’ expectations. Corn sales commitments now total 759 mb for 23/24 and are up 31% from a year ago but behind the pace needed to reach the USDA export target.
• South American weather stays in focus. Current weather models are leaning toward warm and dry conditions continuing into the end of the year. At this point, the weather is likely more supportive of the soybean market, but potential delays or loss of production in the second crop corn in Brazil could support corn prices in the late summer with possible improved late season demand.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower following today’s WASDE report which wasn’t extremely bearish, but expectations were that the report would be friendly which caused a negative reaction. Soybean meal was slightly higher in the December contract but lower in the deferred months, while soybean oil was higher thanks to a reduction in ending stocks and gains in crude oil.
• Highlights from today’s USDA report showed an unexpected increase in the estimate for US soybean yield to 49.9 bpa. Last month’s estimate was 49.6 bpa and no change was expected today. Due to the increase in yield, ending stocks went from 220 mb to 245 mb for 23/24, and demand was unchanged.
• South American soybean production was also updated in today’s report with Argentina’s 22/23 production unchanged at 25 mmt, but Brazil’s increased to 158 mmt from 156 mmt. For 23/24, Argentina’s production estimate was unchanged at 48 mmt, but Brazil’s was increased to 163 mmt despite the hot and dry planting conditions that are persisting due to El Nino.
• Export sales were strong today with an increase of 39.7 mb for 23/24, which was above the average trade guess. Export shipments of 82.2 mb were well above the 31.7 mb needed each week on average to meet the USDA’s export estimate. Further, flash sales were reported of 1,044,000 mt of soybeans to China for 23/24, and 662,500 mt were reported for delivery to unknown destinations.

WHEAT HIGHLIGHTS:

• All eyes were on today’s WASDE report which ended up having a negative tone. The USDA estimated US 23/24 wheat carryout at 683 mb, above the pre-report estimate of 670 mb, which would have been unchanged from October. Additionally, the world ending stocks were also higher than expected at 258.7 mmt. This compares to a pre-report estimate of 257.9 mmt and last month’s number of 258.1 mmt.
• As far as some of the world numbers are concerned, the USDA did lower Argentina’s crop to 15.0 mmt versus 16.5 mmt in October. And the Russian crop was in fact raised by 5 mmt from last month to 90 mmt of production. For reference, this is still below Russia’s estimate of 93 mmt. Overall, global wheat production was projected at 781.98 mmt, which was down slightly from 783.43 mmt last month.
• In addition to the WASDE report, export sales were also released today. The USDA reported an increase of 13.0 mb of wheat export sales for 23/24. Last week’s shipments were disappointing though, at 4.9 mb. This is below the pace needed each week of 14.5 mb to meet their 23/24 export goal of 700 mb.
• Vladimir Putin recently stated that in the coming year, Russia will have 60 mmt of wheat for export, which is about 10 mmt higher than other estimates. But with the USDA raising the world crop today and a higher projection for Russia this could be true. If so, it will continue to weigh on the export market and US futures.
• Although the USDA did lower their Argentina wheat crop estimate today, it is still higher than some other projections. The Rosario Exchange reduced their projection of Argentina’s wheat crop by 5.6% to 13.5 mmt. They also reported that the wheat harvest is 10% complete, and while recent rains have helped to improve conditions it was too little too late to reverse the early damage done by drought.

DAIRY HIGHLIGHTS:

• Class III contracts were mixed on Thursday with the second month December contract falling 9 cents to $17.04.
• Spot cheese was two cents higher on seven loads traded, entering Friday down 0.75 cents on the week. Whey was up a quarter cent.
• Class IV futures, outside of the front month November, were unchanged or higher today. December was unchanged at $19.19.
• This came despite another rough day for spot butter, down 9.75 cents today for 40.75 cents in the last four trading days. Powder was up 2 cents at $1.20/lb.
• On today’s November WASDE report, the 2024 all milk price was upped from $20.55/cwt to $20.80/cwt.

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Author

Amanda Brill