CORN HIGHLIGHTS:

• The corn market saw strong selling pressure with double digit losses on the session after the USDA WASDE report triggered selling. December corn closed 17-¾ cents lower and established a new low for the move. December corn traded to its lowest point since September 2021.
• The USDA lowered the potential corn yield to 177.5 bushels/acres (-4.0 bu/acre), just above market expectations, but did not adjust the demand side of the balance sheet to establish a new carry out projection of 2.262 billion bushels for the 2023-24 marketing year. This total was in line with analysts’ expectations.
• The USDA lowered old crop export demand by 75 million bushels, and traders in the market pressured corn prices feeling that a projected new crop export demand of 2.100 billion bushels, up 450 mb from 2022-23 projections, will be difficult to reach at current corn price levels.
• The weak price action with corn futures trading near the bottom end of the range on the close will likely trigger additional selling pressure in upcoming sessions.
• The weather stays negative price as a beneficial rain system moved across key areas of the Corn Belt on Wednesday. Forecasts are still looking at an active weather pattern for the majority of the corn belt through the end of July.

SOYBEAN HIGHLIGHTS:

• The USDA surprised the market by adding 25 mb to the 22/23 carryout versus an expected 2 mb (255 mb actual carryout vs 232 mb expected), and only dropping 50 mb from the 23/24 carryout numbers from last June to 300 mb, with an estimated yield of 52 bpa. Trade expectations were about 200 mb for 23/24 carryout with a 51.3 bpa yield.
• South American production for 22/23 was left unchanged in today’s report with Brazil’s crop estimated at 156 mmt versus 156.2 mmt expected, and Argentina’s crop estimated at 25 mmt versus 23.6 mmt expected.
• Also in today’s USDA report, global ending stocks for the 22/23 season came in above expectations, as well with an increase of 1.6 mmt to 103 mmt. For 23/24, global stocks were estimated to decrease 2.3 mmt from June to 121 mmt, which is still a record.
• The USDA reported this morning that private exporters reported sales of 105,000 metric tons of soybean cake and meal for delivery to unknown destinations for the 23/24 marketing year.  There has been no confirmation yet of China’s rumored purchase of 10 – 14 cargoes of US soybeans off the PNW for October delivery for their reserves.
• Additionally, as of June 29, China has bought just 1.72 mmt of 23/24 US soybeans versus 7.77 mmt for the same time last year.

WHEAT HIGHLIGHTS:

• The USDA estimated 23/24 all wheat production at 1.739 bb versus expectations of 1.677 bb, and 1.665 on the June report. 22/23 wheat carryout was estimated at 580 mb versus expectations of 583 mb. 23/24 carryout came in at 592 mb when the trade was looking for 565 mb.
• The USDA estimated the winter wheat yield at 46.9 bpa, up 2.0 bu from last month’s projection, and for reference, last year’s average yield was 47.0 bpa.
• Aside from today’s WASDE report, weather looks like it will still be a factor for the spring wheat crop. The next 7 days look mostly dry for the northern US Plains and Canadian Prairies.
• Recent Russian drone attacks on the Ukraine port of Odessa are leading to increased tensions and concern that the Black Sea export corridor will not be renewed next week.
• The sharply lower US Dollar Index was not enough to outweigh the negative results of today’s report. Down the road, however, if it continues to trend lower, it may benefit the export market.

DAIRY HIGHLIGHTS:

• The class III milk trade reverse course on Wednesday and closed double digits lower across the board.
• The cheese market had its first down day in five sessions, ending a strong up streak. Blocks fell 2.50c and barrels fell 3c. There were 12 loads traded in total.
• The whey market lost a quarter cent and closed at $0.2250/lb on 15 loads traded.
• US spot butter was bid a penny higher to $2.4975/lb. This is a new high for the year.
• Class IV milk futures rose anywhere from 2c to 9c. August 2023 class IV closed at $17.84.

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

John Heinberg