CORN HIGHLIGHTS:

• Corn futures used strength in the wheat market to close with small gains on the session. March corn traded 3 ¾ cents higher, holding around the active 485 trading price in range bound activity.
• Corn futures were limited by selling strength in soybean markets and the crude oil markets. Crude oil traded 3-4% lower on the session. Lower crude brings concern about margin for the ethanol industry, a key domestic demand for corn.
• South American weather stays a focus. The next 7 days show a drier forecast with a strong heat wave returning. Longer extended forecasts are more favorable for crop growth if those forecasts materialize.
• China’s grain output rose 1.3% year on year to a record high of 695.41 mmt in 2023. This data was provided by the National Bureau of Statistics on Monday. The record corn production may limit some US corn exports.
• The cash market may act independently of the futures market while prices trade in a range bound fashion. The fluctuation in basis in different regions will likely provide limited marketing opportunities based on overall available supplies.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower closing just above the 50-day moving average. A short span of upcoming hot and dry weather in central and northern Brazil added some weather premium back into the market causing yesterday’s rally. Both soybean meal and oil ended the day lower.
• March soybeans have gained just over 32 cents from their low last week due to news that the 7-day forecast for Brazil would be hot and dry. Heavier rains are forecast to fall beginning December 19 and are expected to last into January, so crop stress should be limited.
• This morning, the USDA reported private exporter sales of 198,000 metric tons of soybeans for delivery to unknown destinations for the 23/24 marketing year. So far, there have been sales reported every day, from last Thursday through today, primarily by China or unknown.
• Crude oil fell to its lowest level since June today which pressured soybean oil, but on the other hand, stockpiles of Malaysian palm oil shrunk last month which could offer support. In addition, the NOPA crush report will be released on Friday and trade is looking for another record large month at 191 mb crushed.

WHEAT HIGHLIGHTS:

• All three US wheat classes reversed from yesterday’s lower closes to finish with double-digit gains today. This rally may have been in part sparked by the Russian government’s ban on durum wheat exports. The ban is in effect until May 31, and is reported to have been put in place to help their domestic prices.
• Also giving a boost today was a higher close for Paris milling wheat futures, and a drop in the US Dollar Index. However, on a bearish note, with the recent upturn in wheat prices, the US has quickly become uncompetitive on the world export market, and this may mean that there will not be any more Chinese purchases to help support the market.
• Kansas released updated crop conditions for their state yesterday. Wheat condition declined 1%, to 39% good to excellent. Additionally, poor to very poor declined 1% while fair increased 2%. Conditions look much better than at the same time last year.
• According to their agriculture ministry, French soft wheat planting for 2024 is down 5.1% year on year with 4.5 million hectares planted and represents a 4.7% decline from the five-year average. The cause of the decline is being blamed on heavy rains.

DAIRY HIGHLIGHTS:

• Barrel cheese is down 6.25c so far this week and on Tuesday closed down at $1.4925/lb on 6 loads traded. The block price didn’t fare much better, falling 2c lower to $1.58/lb.
• US butter has struggled the last couple sessions and has already fallen 17c so far this week. It closed Tuesday at $2.50/lb.
• Both Class III and IV futures saw steady offering on Tuesday, with most nearby contracts down double digits. Second month Class III fell 17c to $16.29, while second month IV lost 10c to $18.80.
• Spot powder lost 0.25c to $1.1625/lb, closing at its lowest level since September.
• The Class III trade holds a steady downtrend at this time.

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Author

Brandon Doherty