CORN HIGHLIGHTS:

• Strong buying in the grain markets helped push corn futures strongly higher on Wednesday. Disappointing crop tour results and strong demand tone are the drivers behind the corn market. September corn gained 9 cents to 473, and December corn added 10 cents to 498. Today’s daily close on December corn was the highest close since May 13.
• The strong technical close above the July high in December corn leaves the market likely to test the May high of 506 ½. The strength in other grains and weak U.S. dollar help support the corn market.
• Pro Farmer released Crop Tour results from Indiana and Nebraska, with both states coming in below last year and their respective three-year averages. The tour continues through western Iowa and Illinois today, where results will be closely watched following USDA’s recent yield reduction.
• USDA will release the weekly export sales report on Thursday morning. Expectations are for corn sales to range from 0-500,000MT for old crop and 500,000 to 1.3 MMT for new crop.  In recent weeks, a late-season surge in old crop demand has helped support the market. 
• Weekly ethanol production dropped to 320 mil. gallons last week, down from 328 mil. gallons the week prior. A total of 107 MB of corn was used last week in ethanol production. The total was slightly behind the pace needed to reach the USDA target for the marketing year. Ethanol stocks rose to 25.1 million barrels, well above last year’s 22.7 million gallon total.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day sharply higher as continued Chinese purchases, lower pod counts than expected on the Pro Farmer tour, and good domestic demand support prices. While NOPA crush numbers came in lower than expected yesterday, they have been steadily climbing higher thanks to rising crush margins. Demand is strong and ending stocks are tight at 320 mb.
• September soybeans gained 21-1/2 cents today and were just 19 cents away from taking out their contract high at 1243. November soybeans gained 20-1/2 cents to 1237-1/4. September soybean meal gained $5.90 to $318.90, while September soybean oil gained 0.17 cents to 69.86 cents. Crude oil was supportive today and is up 65 cents to $85.59 a barrel.
• The Pro Farmer Crop Tour found pod counts in Indiana at 1318.64 per 3×3 plot, compared to 1376.59 last year. In Nebraska, pod counts were 1219.62, compared to 1348.31 last year. Excess moisture is becoming a problem in some states. So far, yields in western Iowa and eastern Illinois are looking disappointing as well, but official numbers will be released later.
• Over the past week China has purchased 641,000 metric tons of new crop U.S. soybeans and is now reportedly up to 22.3% complete with their purchase target of 25 mmt. In addition, they have now purchased a total of 12.5 mmt of old crop soybeans, which put them ahead of their commitment of 12 mmt or 104%.

WHEAT HIGHLIGHTS:

• Wheat rallied sharply today. It was aided by a significant drop in the U.S. Dollar Index after the U.S. government announced plans to double the size of their debt repurchases from $2 to $4 billion. Additionally, wheat received support from higher row crop prices as the Pro Farmer tour has been finding disappointing results so far. In the September contract, Chicago gained 15-3/4 cents to 680-1/4, Kansas City rallied 18-1/4 cents to 762, and MIAX climbed 17-3/4 cents to 694.
• Rusagrotrans has reduced their estimate of Russia’s August wheat exports to only 1.8 mmt (versus 3.1 mmt previously). If realized, this would be a 60% year on year decline, and the lowest total for the month of August since 2010.
• Heavy rainfall is forecast across South Australia, New South Wales, and Victoria into early September. Despite the developing El Niño pattern, the moisture would be favorable for wheat development and could improve production prospects.
• One Ukrainian grain consultant estimates that their 26/27 wheat exports could decline to between 5-10 mmt. Over the past 10 years, the export figure has ranged from 14-21 mmt. For reference, on last week’s WASDE, the USDA lowered their Ukraine wheat export forecast by 1 mmt to 13.5 mmt.

DAIRY HIGHLIGHTS:

• Class III milk gave back yesterday’s gains, with September futures down 21 cents to close at $17.09.
• Spot cheese fell 0.1250 cents to close at $1.5701/lb. Spot whey also weakened, falling 0.25 cents to close at $0.6925/lb.
• Class IV milk turned lower, with September falling 31 cents to close at $18.84.
• Spot butter fell 3 cents to close at $1.430/lb, while spot powder gained 3 cents to close at $1.8100/lb.

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Author

John Heinberg