CORN HIGHLIGHTS:

• Another strong close in the soybean market and short covering in the corn market helped push prices higher for the second consecutive day. December corn added 1 cent to $4.78 ¼.
• Price action could be deemed disappointing after the strong start to the week on Monday. The true lack of follow-through on Tuesday is reflective of the bearish overall tone in the corn market.  Resistance over the December contract is $4.80, which was tested and held during Monday’s trade.
• Corn harvest is moving into the later stages as the USDA pegged harvest at 88% complete, which was 2% below the analyst expectations, but 2 % faster than the 5-year average. The eastern Corn Belt and Wisconsin looked to be the biggest areas of delay.
• Weather forecasts stay extremely hot and dry for Brazil grain producing areas into the end of the week, but some potential rains over the weekend into next week. The accuracy of longer-range models is questionable. These forecasted rains will be key and extended models bring warm and dry conditions back through the end of November.
• Demand will stay in the focus of the market as export sales and shipments are below expectations.  The USDA announced a flash sale of 101,745 mt (4 MB) of corn to Mexico for the current marketing year this morning. These sales are routine, and still are not the totals needed to ease the demand concerns for U.S. corn on the global export market.

SOYBEAN HIGHLIGHTS:

• Soybeans started off nearly 11 cents lower, but ultimately, finished the day higher thanks to strength in both soy products, strong Chinese demand, and hot and dry South American weather.
• Yesterday, soybean meal made new contract highs and was briefly limit up. A new high was made today in December, but the biggest gains were in soybean oil after Malaysian palm oil futures surged by 2.7%. India also increased its imports of palm and sunflower oil by 24% and 54% respectively from the previous year.
• As the meeting between Biden and Chinese President Xi approaches, there has been a sharp increase in the amount of soybeans purchased by China. In the past week, 106 mb of soybeans have been sold to China and unknown destinations with another sale of 7.5 mb reported yesterday.
• Brazil is reportedly 61% complete with soybean planting, but have endured very dry and hot weather with little relief in the forecast. It is estimated that at least 20% of the crop will be replanted and could be a large factor in non-commercials establishing a net long position recently of over 70,000 contracts.

WHEAT HIGHLIGHTS:

• After a two sided trade, Chicago and KC wheat closed in the red, while Minneapolis held gains. This is despite the sharply lower US Dollar Index, which at the time of writing is down 1.46 at 104.17. This huge move down is a result of today’s Consumer Price Index data that was unchanged for October, with expectations for a 0.1% increase. Additionally, the year on year increase of 3.2% was 0.1% lower than what was anticipated. This data suggests that the Federal Reserve may pause another interest rate increase.
• According to the USDA, the US winter wheat crop is now 93% planted, which is in line with the average, but down just slightly from last year. Also, 81% of the crop is emerged, but conditions were lowered 3% from last week to 47% good to excellent.
• The weather conditions in southern Brazil have been far too wet and it is affecting their wheat crop in terms of quality and production. According to CONAB, Brazil’s wheat crop projection comes in at 9.63 mmt – this is a 7.9% decrease from the October estimate. It is also down from the last crop of 10.55 mmt.
• Although France raised their corn crop estimate to 12.5 mmt (from 12.1 mmt), they kept their soft wheat crop production unchanged at 35.1 mmt. Europe has been too wet overall, but this does not seem to have affected wheat all that much.
• The CFTC report was released yesterday, delayed from Friday due to the Veteran’s Day holiday. The data showed that as of November 7th, funds reduced their net short position in Chicago wheat by 9,313 contracts to 92,262. Though nearly a 10% reduction, it remains a hefty, short position that keeps the market primed for a short covering rally if there is friendly news to support it.

DAIRY HIGHLIGHTS:

• For the second day in a row, the dairy market saw positive double-digit movement in nearby contracts as the market works out of oversold territory.
• The spot products are leading the charge higher. Over the past two days, butter is up 9c, cheese is up 3.875c, and whey is up 2.25c.
• Spot whey closed at $0.42/lb, which is its best finish since April 2023.
• The US Dollar Index fell over 150 points, helping to support a higher commodity trade.
• December 2023 class III milk gained 33c and closed at $17.56 while December class IV added 19c back to $19.42.

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Author

Amanda Brill