CORN HIGHLIGHTS:

• Corn futures saw positive money flow on Thursday, supported by a better-than-expected Export Sales report for last week. Dec corn futures finished 4 cents higher, but 9 1/2 cents off the session low, despite strong selling pressure in the grain and crude oil markets.
• USDA reported weekly exports sales of 1.808 MMT (71.2 mb) for the current marketing year last week.  This was larger than market expectations and brings total sales for the 2023-24 marketing year to 21,098 MMT, up 33% versus last year. Mexico was the top buyer of U.S. corn last week at 41.8 mb.
• Crude oil prices traded over 4% lower during the session on Thursday. The drop in crude oil prices could be a limiting factor and margins for ethanol production could tighten, slowing this key domestic demand.
• Some improving forecast for Brazil helped weigh on soybean prices for the session. Corn futures traded independently from both soybeans and wheat on the day. While Brazil forecast is staying dry overall, a weather wildcard will be Argentina. After two years of drought, conditions are improved, which could lead to price limiting production from the South American country.
• Despite the positive price action on Thursday, Dec corn futures are looking to test key resistance at the $4.80 price level. This price point has been a cap overtop the corn market since the start of November.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower following a new forecast for South America, which features better chances of rain for Argentina and northern and central Brazil that is expected to begin on Sunday and last until at least the end of the month. Export sales were strong, but were overshadowed by the weather.
• Both soybean meal and oil ended the day lower as well, with a sharp selloff in crude oil which saw prices break support and drop below 73 dollars a barrel. Soybean meal may encounter pressure down the road as Argentina’s soy crop is being planted in better conditions than the previous year, which could allow them to export more soybean meal next year.
• For the week ending November 9, the USDA reported an increase of 144.0 mb of soybean export sales for 23/24, a marketing year high. Last week’s export shipments of 73.2 mb were above the 30.6 mb needed each week to meet the USDA’s expectations. Primary destinations were to China, the Netherlands, and Bangladesh.
• Following a string of sales recently to both China and unknown, another flash sale was reported this morning of 220,000 mt of soybeans for delivery to unknown destinations for 23/24. Since last week, China and unknown destinations have purchased well over 100 mb of soybeans. President Biden and Chinese President Xi met and reportedly had a “productive meeting”.

WHEAT HIGHLIGHTS:

• The markets took a risk off posture today, with many commodities trading lower. All three US wheat futures classes posted losses with KC leading the way down. Paris milling wheat futures offered no support either, with losses of around two Euros per metric ton.
• The USDA reported a dismal increase of 6.5 mb of wheat export sales for 23/24. Each week, 14.8 mb needs to be exported to reach their goal of 700 mb for 23/24, but last week’s shipments totaled only 11.4 mb.
• Adding to pressure in the wheat market is the Australian harvest, with yields so far better than anticipated. However, according to the Australian government, their wheat production will still be over a third lower than last year’s record harvest due to the hot and dry weather this season.
• Ukraine has reportedly began repairing railroads, presumably damaged in the war. This repair work will allow for cargo to be transported to three Black Sea ports near Odesa. These shipments would then be shipped on Ukraine’s humanitarian corridor that was created after Russia left the Black Sea Grain Initiative.
• France is seeing heavy rains and flooding, which may impact the 2024 soft wheat crop, according to FranceAgriMer. France has seen the highest total rainfall ever (for 26 consecutive days) from October 18 to November 12. President Macron is said to be visiting some of the affected areas.

DAIRY HIGHLIGHTS:

• Nearby Class III contracts were hit hard on Thursday as December futures fell 34 cents to $17.11. Entering Friday, that contract is still up 22 cents on the week.
• Spot cheese fell 1.50 cents to $1.6350/lb, still up a penny for the week through Thursday. Whey fell a half cent to $0.41/lb, still near a 7-month high.
• Class IV was unchanged to lower on light volume. February futures were the hardest hit with a lower close of 10 cents.
• Spot butter erased all of the Monday-Wednesday gains today, falling 9.25 cents to $2.5975. Powder was unchanged at $1.20/lb.

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Author

John Heinberg