CORN HIGHLIGHTS:

• Buyers returned to the corn market on Thursday, as prices finished with strong double-digit gains. Spillover support from the soybean market, and a short squeeze in the July futures, with expiration on Friday, helped triggered the buying support.
• Weekly exports sales reported this morning for corn were slightly above market expectations.  The USDA reported Old Crop sales of 18.4 mb and New Crop sales of 19.4 mb. Numbers are still overall disappointing as Old Crop sales need to average 26.5 mb weekly to hit the USDA export sales target of 1.650 billion bushels for the 2022-23 marketing year.
• The strong price action with December corn pushing back over the $5.00 price level and closing above the 10-day moving average could likely set up additional buying strength on Fridays open. The key to today’s price movement will be follow-through to end the week.
• Traders are questioning final yield projections, as 64% of the corn crop is still experiencing some form of drought, down 3% from last week. In addition, the fungal disease, Tar Spot, is now being found in six states. The spread of this disease will be watched by the market.
• The U.S. Dollar Index has broken through the 100-basis point level and traded to its lowest level since April 2022 on the prospects that Fed interest rate hikes may be coming to an end.  The weaker dollar has helped trigger some money flow into the commodity and equity markets.

SOYBEAN HIGHLIGHTS:

• Soybeans, along with soybean meal and oil, saw big gains today that surpassed yesterday’s losses after the USDA increased the 22/23 carryout to 255 mb and announced a 23/24 carryout of 300 mb, 50% larger than the 200 mb figure that was expected.
• Today’s gains were largely fueled by the fact that 57% of the US soybean crop is experiencing drought conditions with a drier long range forecast for the north central Midwest, and a sharply lower US dollar.
• This morning, the USDA announced that private exporters reported a sale of 315,704 metric tons of soybeans for delivery to Mexico during the 2023/2024 marketing year.
• Chinese customs data shows that soybean imports in June totaled 10.27 mmt, representing a 24.5% increase versus last June, and year over year imports have risen 13.6% to 52.575 mmt, mostly on large purchases of cheap Brazilian soybeans. Chinese demand may be slowing in the second half of the year though, as hog herds begin to shrink due to the lack of profitability and less feed is needed, according to a Chinese consultant, Sitonia Consulting.
• Anec reports that Brazil’s soybean exports are seen reaching 10.45 mmt in July, with soybean meal exports reaching 2.5 mmt for the same period. This compares to just 7 mmt of soybeans and 2.07 mmt of meal exported for the same time last year.

WHEAT HIGHLIGHTS:

• The USDA reported an increase of 14.5 mb of wheat export sales for 23/24. The USDA is projecting 725 mb of exports in 23/24, and commitments now total 184 mb (down 29% from last year).
• Despite a negative report yesterday, all three US wheat futures classes rebounded today and closed in positive territory. It may have been a case of “follow the leader” though, as corn and soybean futures led the charge higher.
• The US Dollar Index continues to decline, breaking below the 100 level today. This is most likely tied to yesterday’s CPI and today’s PPI data, which showed easing inflation. There is thought that the Fed may be close to the end of raising interest rates, and this might be putting some risk premium back into financial and commodity markets.
• In the face of a negative report yesterday, global wheat ending stocks (minus China) are still at an 11-year low.
• Matif wheat closed a little higher, gaining about 1.50 – 2.00 euros. Support may be building for wheat (both US and abroad) at these lower levels. Additionally, there is still uncertainty surrounding the impending expiration of the Black Sea Grain Initiative. Putin reportedly asked for an extension if Russia is let back into the SWIFT banking program.

DAIRY HIGHLIGHTS:

• Second month Class III futures closed 52 cents higher at $15.34, the highest close for the August contract in 12 days.
• After a hiccup yesterday, the block/barrel average was up 3.25 cents today to total 7.8750 cents for the week.
• Spot butter kept its winning ways going today with a 3.25 cent jump, getting back over the $2.50/lb mark for the first time since December.
• US spot powder enters Friday up 2.75 cents for the week after finding support near $1.10/lb.
• Class IV milk contracts all saw double digit gains as well with August futures moving back over $18.00.

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Author

Brandon Doherty