CORN HIGHLIGHTS:

• Corn prices rebounded on the session today as the market saw moderate gains. March corn gained 7 ¼ cents and May futures added 8 cents during the session.
• Corn futures saw a short covering rally as the managed money moved to a record short position on last week’s Commitment of Traders report. As of last Tuesday, hedge funds were short of a net 340,723 contracts, pushing through the previous record short position from 2019.
• The strong price action on Monday has the corn market improved technically as daily charts posted key reversals on the session. With a heavily oversold market, prices could see an additional corrective bounce, despite overall bearish fundamentals.
• In Brazil, second crop corn plant progress is running well ahead of the 5-year pace. Weather at this point is not an issue, but talk of a possible change in the weather patterns is a focus of the markets, helping lead to the short covering rally.
• Weekly export shipments for corn were strong last week. US exporters shipped 48.9 mb (1.242 mmt) of corn, which was above expectations. Currently export inspections are up 36% over last year, and slightly ahead of the pace to meet the USDA’s export targets.

SOYBEAN HIGHLIGHTS:

• Soybeans were mixed throughout the day with prices significantly lower near midday before rebounding into the close. The front months ended higher, while the November contract was slightly lower. This was also the theme for soybean meal and oil in which the front months gained on the deferred months, although the deferred contracts in meal did settle lower on the day.
• Soybean export inspections were within expectations totaling 35.8 mb for the week ending Thursday, February 22. Total inspections for 23/24 are now at 1,214 mb, which is down 22% from the previous year. No flash sales were reported today or last week, and last week’s export sales report was a marketing year low with net cancellations.
• The Brazilian soybean harvest is now 38.03% complete which compares with 34.51% at this time last year. With Brazil’s harvest ongoing, cash soybeans have fallen to prices significantly below those in the US, and there have been recent reports of Brazilian soybeans being imported into the US.
• Friday’s CFTC report showed non-commercials selling 2,177 contracts of soybeans last week leaving them short 136,677 contracts. This is the largest net short position in soybeans since 2019. Today’s reversal could be an indication that the funds are beginning to lighten this short position, but it could also have to do with first notice day for March futures which is this Thursday.

WHEAT HIGHLIGHTS:

• Wheat finally stopped the bleeding, posting a higher close in all three classes and a bullish reversal alongside corn and soybeans. Early weakness, in part due to another lower close for Matif futures, was rebuffed. However, there was no major news to trigger this rally, indicating that it was likely technical in nature.
• Weekly wheat inspections at 17.7 mb bring the total 23/24 inspections to 463 mb. All things considered this is a decent number for the week. But with that said, inspections are still down 18% from last year and running behind the USDA’s estimated pace.
• On a bearish note, Russian wheat exports continue to dominate. Their FOB wheat values are said to have declined again, to between $210 and $213 per mt. This may limit the upside potential of the US market for some time to come.
• Between February 14 and 20, funds are said to have added just over 18,000 short wheat contracts, bringing their combined Chicago and Kansas City net short position to just over 110,000 contracts. While not a record like in corn, it is still a large number of contracts that keeps the market primed for a potential short covering rally.
• According to Ukrainian officials, 160 tons of their grain was destroyed at a railway station in Poland due to large protests. While 160 tons is not much in the big picture, the reasoning for the destruction is what is important; Polish farmers are said to be protesting unfair competition from Ukraine. Despite a major war in their nation, the Ukrainians have been very successful at getting grain exported, even with the closure of the Black Sea Grain Initiative last July.

DAIRY HIGHLIGHTS:

• Spot cheese closed 4.75 cents higher at $1.63/lb today with blocks up 4.00 cents and barrels 5.50 cents higher. Whey dropped 2.50 cents to $0.4975/lb.
• Class III futures were mostly higher on the solid cheese trade with March jumping 27 cents to $17.58 and April garnered 15 cents.
• Butter was unchanged at $2.85/lb with 8 loads traded while powder fell just a quarter cent.
• Class IV contracts were mostly unchanged with March even with Friday’s close at $20.20 while April dropped 8 cents to $20.46.

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Author

Amanda Brill