CORN HIGHLIGHTS:

• Short covering and strong export sales numbers helped push the corn market higher on the session for Thursday. Dec corn traded 12 cents higher, and March added 7 cents.
• December corn went into the delivery period with “first notice day” today. There were “zero” deliveries against the December futures which is supportive in prices. The large spread or carry between Dec and March corn triggered some short covering in the December futures.
• Weekly Exports sales were well above expectations on Thursday’s USDA export sales report. Last week, U.S. exports posted new sales of 1,927,800 MT (75.9 mb) of corn exports for the marketing year. Total sales are now at 963 mb, which is 33% greater than last year. “Unknown destinations” and Mexico were the largest buyers of U.S. corn last week.
• Funds are still carrying a sizable bearish bet on corn futures with an estimated net short of 200,000 contracts. U.S. corn export sales for the week ending November 23 were a hefty 75.9 mb for 2023-24. The improved technical picture and jump in demand could have the funds square positions into the end of the year, supporting a limited price rally.
• South American weather will stay as focus of the grain markets going into December and the end of the year. The prospects of further soybean planting delays will push second-crop corn planting back even further. The current South American weather could potentially be a larger corn story in late spring and summer.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower despite gains in both corn and wheat. While funds may be short covering corn and wheat to end the month, they may also be reducing their large net long position in case South American weather continues to improve.
• Both soybean meal and oil closed lower today, but crush margins remain profitable as demand for renewable diesel increases and export demand for meal remains strong. This strong domestic demand has been a major factor in supporting prices considering tight ending stocks.
• Today’s export sales report was friendly with the USDA reporting an increase of 69.6 million bushels of soybean export sales. This was above the upper range of expectations but still down 17% from the previous year. Shipments were primarily to China, Mexico, and Vietnam. In addition, a flash sale of 134,000 mt of soybeans was reported to China for the 23/24 marketing year.
• Today, OPEC agreed to a significant production cut of another million barrels per day which will most likely elevate crude oil prices further, especially with ongoing war in the Middle East. Higher crude oil prices could be supportive to soybean oil.

WHEAT HIGHLIGHTS:

• Wheat continued to rally today with Chicago posting double-digit gains. A technical correction from oversold conditions may have led to funds covering their short position. As it is also the end of the month, there may have been some position squaring as well. This rally also comes despite firmness in the US Dollar Index, which as of writing is back up to 103.50.
• The USDA reported an increase of 22.9 mb of wheat export sales for 23/24 and an increase of 0.4 mb for 24/25. To reach the USDA’s 23/24 export goal of 700 mb, 15.1 mb need to be shipped each week. But last week’s shipments were below that pace at 12.5 mb.
• Taiwan flour millers purchased about 110,000 mt of US milling wheat for January / February shipment. This also offered some support to the market and may indicate that global importers may be looking for US wheat after it hit recent lows.
• According to IKAR, their first estimate of the 24/25 Russian wheat crop is 92 mmt. Exports are projected at 48 mmt. Planted area may be the second largest on record as well. This could offer some bearish resistance down the road, as Russia is already the prevailing force in the wheat export market.
• The El Nino weather pattern is bringing rains to Argentina’s coastal region. Wheat crops in these areas are seeing yields above expectations, which may help to offset some of the losses in other parts of the country. However, farmers there are not selling their wheat – they are waiting for the new president to take office. There is talk that there may be further devaluation of their currency.

DAIRY HIGHLIGHTS:

• Spot cheese was lower once again with blocks falling a nickel and barrels up 2.50 cents to close at $1.5250/lb. Spot whey was unchanged as it sits just under $0.40/lb.
• Class III futures were mostly lower with the now second month January contract down 3 cents to $16.19. The 2024 average fell 3 cents to $17.94.
• On the Class IV side, futures were mixed but the December contract was up 19 cents, January was unchanged, and February was up 12.
• This came on another positive day for spot butter which was 3.25 cents higher. Powder, however, dropped two cents to close at $1.1750/lb.

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Author

John Heinberg