CORN HIGHLIGHTS:

• The corn market broke apart technically and saw strong selling pressure triggered by weekend rains and August forecast that should allow for good overall development of the corn crop.
• The entire grain complex was under pressure on the day, corn futures opened with a price gap lower on the overnight session and the selling pressure was maintained as market prices dropped through key moving averages. Dec corn posted its lowest close since July 18. The weak technical picture and lack of bullish news may have Dec corn poised to retest the July lows near $4.80.
• Weekly export inspections were within trade expectations at 20.6 mb. Total inspection for old crop exports is still running 33% behind last year, but equal to the pace to reach the USDA target with one month left in the marketing year.
• Brazilian corn harvest continues to progress, analyst estimate that this year’s Brazil corn harvest is near 50% complete, which is running nearly 20% behind last yeas pace.  The influence of the fresh Brazil supplies pressures global corn prices.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day sharply lower with large losses in soybean meal and oil. Weather forecasts over the weekend turned cooler and wetter for the next 7 days and potentially longer, which was likely the main pressuring factor.
• Exports were surprisingly active today considering the price action with 132,000 mt sold to China and 183,300 mt of soy cake and meal sold to the Philippines. There have been friendly underlying fundamentals that are being overshadowed by the current forecasts.
• Soybean inspections totaled 12.1 mb for the week ending Thursday, July 27 which puts total inspections for 22/23 at 1.856 bb, which is down 6% from the previous year. Brazil is maintaining their lead in soy exports, but the US should become more competitive later this year.
• Apart from updated weather forecasts adding pressure to prices, November soybeans are in a bearish ascending wedge pattern which would put the next downside target area near 12.55, but the overnight trade also left a gap on the chart above the market at 13.79 which the market may look to fill.

WHEAT HIGHLIGHTS:

• All three US wheat markets closed sharply lower alongside Paris milling wheat futures. This is the fourth consecutive lower close for Chicago wheat. A lack of follow through attacks in Ukraine put the market on the defensive. News that Ukraine launched a drone strike on Moscow was not enough to trigger a rally either.
• Weekly wheat inspections of 21.4 mb bring the 23/24 total inspections to 101 mb, which is down 5% from last year. Currently, the USDA is estimating wheat exports at 725 mb.
• According to SovEcon, Russia’s wheat harvest is now projected to be 87.1 mmt. Previously, the estimate was 86.8 mmt, and this revision higher may have also offered weakness to wheat today.
• Possibly adding more pressure to the market was the spring wheat tour last week that found yields higher than expected.
• As of last Tuesday, the CFTC said the funds were still short 40,000 contracts of Chicago wheat. Given market action at the end of last week and to begin this week, it is likely they are adding to short positions.

DAIRY HIGHLIGHTS:

• Both the block and barrel cheese market finished Monday at new highs for the move. Blocks came up 5.25c to $1.96/lb and barrels added 10.75c to $1.87/lb.
• The rally in cheese to a close over the $1.90/lb level helped to aide in higher milk futures. The rest of the spot trade was soft, however.
• August class III rallied 43c to $17.69 while September jumped 40c to $18.10. The class IV market was quiet for the most part.
• News and events this week include a Global Dairy Trade auction on Tuesday as well as a Dairy Products Report on Friday.
• Tuesday is the last trading day for July dairy futures. After Tuesday, August will move into the front month spot and September will be the new second month contract.

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Author

Amanda Brill