CORN HIGHLIGHTS:

• Corn futures failed to push through resistance early in the session and reversed over during the day.  Dec corn lost 7 1/2 cents on the session. The weak price action saw the daily chart post a bearish reversal, which could lead to additional technical selling on Thursday.
• Brazil’s weather forecast is looking for some possible rain chances this weekend into early next week. The prospect of rain triggered profit taking in the grain markets. Longer term models are keeping the current dry and hot forecast in place, but the Brazil crops could see some temporary relief.
• Argentia weather is improving, which should support corn and soybean production this season. After two year of drought, Argentina crop coming back to full production would greatly limit the impact of a possible loss in Brazil bushels.
• The USDA will release the weekly export sales report on Thursday morning. Expectations are for sales to range between 900,000 – 1.55 MMT of new sales last week. The USDA announced a flash 124,000 MT (4.8 mb) for corn to Japan this morning for the current marketing year.
• Daily ethanol production for the week averaged 1.047 million barrels. This was up 0.5% from last week and up 3.6% from last year. Ethanol stocks were 20.954 million barrels. This was the lowest since December 24, 2021. Last week, corn used for ethanol was estimated at 103.92 million bushels, and the overall trend for corn usage stays friendly compared to USDA forecasts.

SOYBEAN HIGHLIGHTS:

• Soybeans were bear spread today, with the front months ending the day lower, with November 2024 ending slightly higher. January took out yesterday’s high this morning and reached 13.98-1/2, but has struggled to get above the 14-dollar mark.
• NOPA soybean crush numbers were very impressive today, with October 2023 crush at 187.775 mb, which was an all-time high for any month and way above the average trade guess of 187.237 mb. Soybean oil stocks came in below expectations at 1.099 billion bushels and this was the sixth straight monthly fall, signaling the still strong demand.
• This afternoon, President Biden and Chinese President Xi will meet in San Francisco for the Asia-Pacific Economic Cooperation summit, and leading up to the meeting, China has been an active buyer of US soybeans. Since last week, China and unknown destinations have purchased over 100 mb of soybeans from the US.
• Weather in central and northern Brazil remains very hot and dry, with talk of an increased chance for rain over the next 7-days, but southern Brazil continues to receive too much rain. Trade has been watching South American weather closely, but Argentinian weather has improved recently, which would add a large amount of soybean meal back to the market if their soy production returns to its typical production of 45 mmt, rather than the meager 25 mmt in last year’s drought.

WHEAT HIGHLIGHTS:

• A risk off session led to a lower close for the wheat market. Lower corn, soybeans, crude oil, and Matif wheat futures, in addition to a higher US dollar, all offered weakness to US wheat futures. A lack of fresh bullish news may have also played a part in today’s softness.
• According to the Ukrainian Grain Association, their wheat exports are down 32% from last year. Although this statement may sound like a broken record, it bears repeating:  Russia continues to dominate the wheat export market, and that is keeping a lid on futures prices, as US exports have fallen to the lowest level in 52 years.
• The US Plains may see some shower activity over the next five days or so. While rain totals are not expected to be heavy, it is still expected to bring relief to some of the drier areas.
• Kazakhstan’s wheat production estimate has been reduced by 5.6% to 13.0 mmt due to heavy rain and delays to harvest.
• The drought in Brazil is causing more shipping delays than expected, with low Amazon River levels, and grain exports are being re-routed South. While this is mainly impacting corn and soybeans at this point, it could have repercussions for the grain markets as a whole.

DAIRY HIGHLIGHTS:

• Spot products gave up some gains after trading higher the past two days. Blocks gave up 2.75 cents while barrels went unchanged.
• Butter was unchanged on the day while futures continue to rally through the midpoint of the week. The December contract moved 6 cents/lb to close at $2.7200/lb.
• Spot whey lost half a cent while spot powder lost a couple of pennies to close at $1.200/lb.
• Class III milk futures gave back some losses today losing 3-11 cents on November-February contracts.
• Class IV futures were up 1-20 cents getting some support from the butter market which is rallying early this week.

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Author

Brandon Doherty