CORN HIGHLIGHTS:

• A neutral USDA report helped trigger some short covering in the corn market as futures traded higher for the first time in five sessions. The daily close posted a bullish reversal on corn charts, which could provide some additional buying strength going into tonight’s session.
• The USDA lowered projected harvested acres for corn to 82.7 million acres, down approximately 700,000 from the July totals. With the reduced acres, and strong crop rating, the USDA raised yield forecasts for this year’s corn crop to 183.1 bu/a, up 2.1 bu/acre from previous estimates. Key US corn producing states of Iowa (209 bu/a), Illinois (225 bu/a), and Indiana (207 bu/a) are expected to reach record yields this harvest.
• The record yield potential offset the acres lost in the supply/demand balance sheet as new crop corn carry out was lowered slightly to 2.073 billion bushels, down 23 mb from July. To reach this target, the USDA increased corn export demand, but lowered domestic use slightly. Corn stock to use ratio is at 13.9%, which is still considered heavy in the market’s view.
• Managed money exited 52,000 net short positions as of August 6, to a net short of 242,545 contracts.  In the past 4 weeks, funds have cut their net short position by nearly 110,000 net short contracts as prices have continued to trend lower. The pressure on prices has been increased by farmer selling and commercial selling into the corn market as producers in the US and South America are undersold in their corn position.
• USDA weekly export inspections for corn were at 975,000 Mt (38.4 mb), down from last week’s totals. Total inspections in 2023-24 are now at 1.926 bb, up 37% from the previous year, and slightly ahead of USDA projections with only a couple weeks left in the marketing year.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower following a bearish WASDE report and weakness in both soybean meal and oil. November soybeans reached their lowest level since January 2021 and are not far from the life of contract low. Weather is bearish as well with the majority of the Corn Belt receiving moisture and temperatures not too hot.
• Today’s WASDE report came out more bearish than anticipated for soybeans with the USDA estimating the national yield at 53.2 bpa which was above the average trade guess of 52.5 bpa and above last month’s estimate of 52.0 bpa. Harvested acres were also increased by 1 million to 86.3 million acres which was well above the average trade estimates. Production was called higher at 4,589 million bushels, US stockpiles for 23/24 were unchanged, and for 24/25 they were increased to 560.0 mb from 435 mb last month. World stockpiles were increased to 134.3 mmt for 24/25 from 127.8 mmt last month.
• This morning, the USDA said that 300,000 tons of soybeans were sold to unknown destinations. Of the 300,000 MT total, 100,000 metric tons is for delivery during the 2023/2024 marketing year and 200,000 metric tons is for delivery during the 2024/2025 marketing year. If China was behind the purchases, it would confirm some of the rumors that were going around.
• The USDA released its weekly export inspection on Monday morning. Last week US exporters shipped 327,000 MT (12 mb), which was up slightly from last week. Total inspections in 2023-24 are now at 1.593 bb which is down 15% from the previous year with only a couple weeks left in the marketing year.  Export inspections are on pace to hit the USDA export target.

WHEAT HIGHLIGHTS:

• Wheat closed with modest losses in Chicago and Kansas City futures while posting slight gains in Minneapolis contracts.  Early pressure stemmed from Paris milling wheat futures, which gapped lower, despite a poor looking French crop that could see a 25% drop in production when compared with last year. A relatively neutral report for winter wheat did not allow much upside movement, but a drop of 34 mb to 544 mb of spring wheat production lent some support to that market.
• On today’s WASDE report, the USDA reduced both planted and harvested wheat acreage to 46.3 ma and 37.9 ma respectively (both were reduced by 900,000 acres). Due to the drop, the USDA also lowered their total production forecast by 26 mb to 1.98 bb. They also increased the national yield by 0.4 to 52.2 bpa.
• US wheat ending stocks for 23/24 were left unchanged at 702 mb, but for 24/25 they were reduced from 856 mb to 828 mb. Globally, the 23/24 carryout was raised from 261.0 mmt to 262.4 mmt, while the 24/25 carryout was reduced from 257.2 mmt to 256.6 mmt. Other notable data includes 24/25 production being cut 2 mmt in the EU, while being raised 2.1 mmt in Ukraine and 1 mmt in Australia.
• Aside from today’s report, traders also received weekly export inspections. Wheat inspections at 23.9 mb bring the total 24/25 inspections to 155 mb, which is up 27% from last year. Exports were kept unchanged at 825 mb on today’s report, remaining 17% higher than the previous year.
• APK-Inform has reportedly raised their estimate of the 2024 Ukrainian grain harvest to 55 mmt vs 52.76 mmt previously. This is due to a projected larger harvest of wheat and corn, and they also increased the export forecast from 36.16 mmt to 38.8 mmt. Of that total, 13.4 mmt may be wheat. Finally, the Ukrainian ag ministry has said that wheat harvest has reached 20.9 mmt as of August 4.

DAIRY HIGHLIGHTS:

• Spot cheese jumped 6.375 cents to close at $2.0450/lb, its highest point since the fall of 2022. Barrels are at a 9 cent premium to blocks.
• Class III futures loved the cheese trade and closed sharply higher with the second month September contract at $21.13, 45 cents higher than Friday.
• Spot butter remains rangebound but had a nice 4.25 cent jump today to close at $3.14/lb while powder was 1.50 cents higher to $1.2150/lb.
• Class IV futures were mostly unchanged today with September and October seeing small gains.

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Author

John Heinberg