CORN HIGHLIGHTS:

• Corn futures used the improved technical picture and announced export sales to help push higher during the session. May corn futures gained 5 ¼ cents and posted its highest close in nearly two weeks.
• The corn market saw follow-through buying after weekly charts posted reversals with Friday’s close. The higher close in May corn last week was the market’s first positive weekly close in 11 weeks.
• The USDA announced a flash sale of corn to Taiwan this morning. The sales totaled 4.3 mb (110,000 mt) for the current marketing year. This was the first announced sale of corn to Tiawan since January 2017.
• The USDA released weekly export inspections totals for last week during the session. Last week, US exporter shipped 42.7 mb (1.084 mmt) of corn. Total export shipments are at 812 mb, up 35% from last year.
• On this week’s Commitment of Traders report, managed money exited 45,474 net short positions, moving their net short position to 295,258 contracts. Historically, this is still an extremely large short position and could see addition short covering before Friday’s USDA WASDE report.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher but backed significantly off their earlier morning highs which saw May futures as high as 1165 ¾. Early support came from the report of a sale of soybean cake and meal to unknown, and decent export inspections. Both soybean meal and oil closed slightly higher.
• Export inspections for the week ending February 29 showed soybean inspections at 1.021 mmt, which was toward the higher end of the estimated trade range. Export inspections are down 20% year over year as the world relies further on cheaper South American soybeans.
• This morning, private exporters reported a flash sale of 126,000 metric tons of soybean cake and meal for delivery to unknown destinations. 30,000 mt of that total is for delivery during the 23/24 marketing year while the other 96,000 mt is for delivery during the 24/25 marketing year. This was encouraging since flash sales have been few and far between with Brazil harvesting its crop.
• With weather in South America improving, StoneX has increased their estimate for Brazilian production to 151.6 mmt which is up 0.8% from their last guess. Many analysts are closer to 149 mmt despite the USDA keeping its estimate at 156 mmt. The March WASDE report will be released this Friday and the trade will look to see if that number is lowered.

WHEAT HIGHLIGHTS:

• All three US wheat classes posted gains in tandem with Paris milling wheat futures. May Chicago wheat did make a new contract low before reversing with strength into the close. Some upside may have come from reports that ABARE, part of Australia’s federal agricultural department, has projected their 23/24 wheat crop at 26 mmt. That is down 36% from last year, and for reference, the USDA is projecting a 25.5 mmt crop.
• Weekly wheat export inspections at 12.98 mb bring the total 23/24 inspections number to 476 mb. This keeps inspections in line with recent averages and in line with expectations; the USDA is estimating 725 mb of exports for 23/24.
• According to IKAR, last week Russian wheat export values hit a low of $203 per metric ton FOB. That is down from $215 the week before and the continued fall of Russian prices is a big obstacle for the US market to overcome. In addition, this Friday will feature the monthly WASDE report, where some are anticipating that the USDA may raise the Russian wheat crop. US numbers are not expected to show major changes, however.
• India is projecting warmer-than-normal temperatures for the next few months. This may affect their wheat crops in the major growing regions. According to their director general of the Meteorological Department, maximum temperatures are likely to be above normal in many areas of the country. India is already restricting exports of wheat, among other products, to keep food prices down, so this poses another threat. With that said, India is also estimating a 112 mmt crop, which would be up 1.3% from a year ago.
• Aside from Friday’s upcoming USDA report, there are also several outside influences this week that may affect wheat and the commodity markets in general. First off is Super Tuesday, in which many US states will hold primary elections. Also on Tuesday is the annual Chinese parliament gathering at which they are expected to announce a stimulus package to help their economy. And finally, the Fed chairman is also expected to speak in front of congress this week regarding interest rates.

DAIRY HIGHLIGHTS:

• Monday’s dairy spot trade closed as follows: butter +5.25c, cheese down 1.25c, powder and whey unchanged.
• Class III is working through a downswing right now as frustrations mount over the fact that cheese can’t hold onto a rally and the whey price is back below $0.45/lb.
• April 2024 Class III milk finished Monday at $16.58, just 23c off of contract lows. This is down from the 2/26/24 high of $18.13. Volatility remains high.
• Volume for Class III was on the lighter side during the session.
• There will be a Global Dairy Trade auction tomorrow.

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Author

John Heinberg