CORN HIGHLIGHTS:

• The corn market saw some buying strength on Tuesday as prices posted moderate gains on the session. With overall news relatively quiet, a second day of strength in the wheat market and short covering helped support corn futures but failed to push through the 440 price level.
• The corn export market is supportive of prices as US corn is fairly priced versus global competition, and that has been reflected in multiple weeks of good export sales and shipments. The export sale and shipment pace is currently running ahead of the USDA target. With an overall heavy US supply picture, corn futures may be limited in rally potential so as not to price US corn out of the export market.
• The national average corn basis has improved again this past week. On Monday, the national basis was 26.4 cents under the May futures, reflecting limited participation of cash sellers at these price levels.
• Brazilian weather looks suitable overall for crop development of the second (safrinha) crop corn as planting finishes. There are regional reports on stress due to heat, but the weather trend still looks favorable.
• Chinese corn imports for January and February were approximately 6.190 mmt, up 165 year-over-year. US to China corn shipments in this window have been light, reflecting the impact of the strong Brazil corn export program this winter.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day mixed with slight losses in the front months and a slight gain for new crop in quiet, range-bound trade. Soybean meal ended the day higher, but soybean oil was pulled lower by palm oil which may have seen some profit taking from its recent rally.
• Brazil’s harvest is over 63% complete with the main growing state of Mato Grosso 96% complete. Weather has been conducive to harvest, but production estimates are very varied. In Argentina, weather has been favorable and this morning, Dr. Cordonnier raised his estimate of Argentine production by 1 mmt to 51 mmt.
• In Indonesia, palm oil exports have fallen by 25.4% month over month to 1.59m tonnes from 2.13m tonnes in January. This has caused a rally in palm oil futures which has mostly supported soybean oil over the past week, although prices have begun to slip.
• Tomorrow, the Federal Reserve will announce whether they are cutting interest rates or holding off again. So far, with the US dollar higher, traders may be pricing in that they will not reduce rates. Often, when the dollar rallies, it can pressure commodity prices.

WHEAT HIGHLIGHTS:

• It was another up day for all three US wheat classes. Paris milling wheat futures again lent support with a higher close for the third consecutive session. Today’s move upward is also despite a higher trend in the US Dollar Index, and winter wheat conditions improving in three of the four reporting states. The only decline was in Oklahoma, with a 4% drop to 61% good to excellent.
• As mentioned yesterday, there is more talk that the EU is preparing to issue sanctions against Russia. Specifically, they may impose tariffs on grain imports. A duty of 95 euros per mt would be set in place for Russian (and Belarusian) cereal grains; a 50% tariff would be added to oil seeds and products. Furthermore, the Polish prime minister has called for an outright EU ban on imports of Russian ag goods.
• In southern Brazil, 2023 wheat production was down 35.9% from the previous year. And now, due to depressed prices, the planted area for 2024 may decrease. However, if production is average, it will lead to greater supply than a year ago. CONAB is projecting a 6% decrease in planted areas but a production increase of 18.4% from 2023 at 9.59 mmt.
• According to the Iraqi Ministry of Commerce, their country has achieved self-sufficiency with 2 mmt of wheat in reserves. They are said to use about 4.5 – 5.0 mmt of wheat per year. In other words, they will not need to import wheat to maintain their stocks for seven months; they are also anticipating a large upcoming crop. Additionally, they have been able to use groundwater to irrigate and grow large crops in recent years, in the face of the country’s worst drought on record.

DAIRY HIGHLIGHTS:

• The Global Dairy Trade Auction declined 2.80% today with cheese, butter and powder all negatively impacted.
• Class III milk despite the negative GDT closed higher on the day led by Q3 futures contracts seeing more than a 25 cent gain. The 2024 Class III average also improved 16 cents to $17.46/cwt.
• The spot trade was lackluster with cheddar, whey and butter all unchanged while powder saw a 2 cent loss at $1.1250/lb.
• Class IV futures were mixed but did see more trading volume than unusual at 174 contracts. The 2024 Class IV average was able to gain a penny to close at $20.36/cwt. The Class IV average still holds a $2.90 premium to its counterpart Class III.

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Author

Amanda Brill