CORN HIGHLIGHTS:

• Corn futures saw some late session buying strength to push slightly higher on the sessions. March corn added 3 ¾ cents on the days but was 2 ½ cents on the week.
• Relatively quiet news day in the corn markets as prices saw positive money flow toward the end of the session. Managed funds are still sitting in a large short position in the corn market, and likely squared some of those positions heading into the weekend.
• December corn futures expired on Thursday. The concern in the market now is the carry to the March contract. March is currently holding a 23 ¾ cent carry to December’s final closing price, and this could keep pressure on the March contract as demand concerns, and a large current supply of corn, will limit the front end of the corn market.
• Ethanol margins should see some price support with a potential turn in energy prices. Both crude oil and gasoline prices are looking to close the week with gains for the first time in 8 weeks on Friday afternoon. This could signal a potential near-term low in energy prices, which should help support the corn market if the trend turns higher.
• South American weather will remain a focus for the market. The next 7 days show a more moderating precipitation. Longer extended forecasts are more favorable for crop growth, but those forecasts will need to materialize. The South American weather concerns will likely be a longer-term corn story as Brazil looks towards soybean harvest and corn planting in the weeks ahead.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day mostly lower apart from the January contract which closed higher by a hair. Soybeans came back significantly from their lows earlier in the day, and soybean oil ended with a higher close, while meal ended higher in the two front months.
• For the week, January soybeans gained 11 ¾ cents, January meal gained just 0.90, and January soybean oil lost 0.21. Some strength came from the hot and dry conditions in Brazil this week, but rain is set to return next week. Flash sales were reported nearly every day this week, which also added support.
• This morning, the USDA reported private exporter sales of 134,000 mt of soybeans for delivery to China and 447,500 mt for delivery to unknown during the 23/24 marketing year. Just this week, 1,436,500 mt of soybean were reportedly sold with China and unknown destinations as the main buyers. At least one sale was reported each day this week.
• The NOPA crush report was released today and showed a near record crush for November at 189.038 mb, which was above the average trade guess of 187 mb and above last year’s 179 mb. Crush margins have slipped this week but remain profitable.

WHEAT HIGHLIGHTS:

• All three US wheat classes closed higher again today, despite a mixed to lower close in Paris milling wheat futures. The US March contracts all closed near session highs, despite the US Dollar’s two-sided trade, and strength into the close. Yesterday’s export sales were a marketing year high at 54.8 mb and the largest since June of 2020. Wheat may have traded higher today following through on that news. With the recent large sales to China, wheat export commitments are now up 3% versus a year ago, with the USDA forecasting a decline of 4.5%.
• On a bearish note, rain today in the US southern Plains will benefit the winter wheat crop and also help soil conditions. There are also chances for more rain over the next two weeks. While this may not have much impact currently, it may lead to improved conditions in the spring that could pressure the market.
• Now that the Federal Reserve’s policy on raising interest rates seems to have ceased, this could mean that fund money may begin to flow back into the agriculture sector. Currently, index fund holdings in the ag space are down about 35% from the peak in 2022 when the Fed began raising rates.
• Farmer groups are opposing Argentina’s move toward increasing export taxes on corn, wheat, and other ag goods, from the current 12% to 15% under the new president’s leadership. Argentina has also re-opened their grain export registry after a brief pause.
• The El Nino weather pattern is expected to intensify to one of the top levels on record. If these predictions are true, it would make this El Nino pattern one of the strongest historically since 1950. This pattern could mean a colder winter for the southern US, but milder conditions in northern regions, and far reaching impact globally. The US Climate Prediction Center is estimating a 75% chance that the pattern will persist into May.

DAIRY HIGHLIGHTS:

• Spot cheese saw its worst close since July today after dropping 4.75 cents to close at $1.4850/lb. Spot whey went unchanged closing out the week at $0.3950/lb.
• Class III futures fell hard once the spot trade was settled. Cheese continues to pressure Class III as we near the last two weeks of the year.
• Spot butter ended the week by gaining back some of the losses from Wednesdays trade. Butter climbed 3 cents to finish out the week at $2.49/lb. Powder lost half a cent to close out at $1.1600/lb.
• Class IV futures were mixed with front months gaining while back months were weaker. A stronger butter market heading into the weekend helped front months see gains.

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Author

Brandon Doherty