- Corn futures followed through on the firm close of Tuesday to post solid gains for Wednesday’s session. Options expiration of September options on Friday and the prospects of more variability in Iowa and Illinois corn yield on the Pro Farmer tour may have helped the buying strength.
- Pro Farmer crop tour is finding variable, but moderately good yields, which may be confirming the possible corn supply available this harvest. Yesterday, Pro Farmer forecasted corn yield in Indiana at 180.89 bu/acre and Nebraska at 167.22 bu/acre, both above last year’s levels. The tour moved into Iowa and Illinois today for sampling.
- September corn options expire on Friday, which could lead to an increase in volatility as prices have a tendency to move to large areas of open interest. Wednesday started with 17,500 open puts at the Sept 480 strike price.
- Demand will stay the focus of the market. The USDA will release weekly export sales numbers for last week on Thursday morning. Expectations are for this week’s totals to still be lackluster as the overall export pace remains sluggish for new crop sales. The current marketing year ends on Aug 30.
- Longer range weather forecasts are keeping temperatures above average for the majority of the Corn Belt with limited rainfall until next week. The warmer and dry conditions may limit any chances for the crop to finish out strong, limiting the top end of production.
- Soybeans ended the day higher, along with both soy products as the Pro Farmer tour went through Illinois with yields coming in a bit lower than expected. Dry weather forecasts over the next 6 to 14 days also supported prices today.
- The crop tour completed its run through of Nebraska and Indiana yesterday, and found pod counts in a 3×3 plot with an average of 1,160.02 in Nebraska and 1,309.96 in Indiana, both ahead of last year.
- Exports have been mostly sluggish, but a slow stream of small sales to China and unknown destinations has been coming in and today, a sale of 100,000 metric tons of soybean cake were reported to unknown destinations for the 23/24 marketing year.
- The US Energy Department said today that supplies of ultra-low sulfur diesel were up slightly to 107.0 million barrels last week, which was up 6% from last year, but at the lower end of the 10-year range. The news could imply an uptick in soybean oil demand for biodiesel. Crush margins have also been profitable, which has incentivized processors.
- Renewed Russian attacks overnight on Odesa and Danube River area grain facilities did not have much of an initial impact on the markets this morning. However, the fact that wheat finished higher in all three futures classes may indicate that some more war premium was factored in by the end of the session.
- According to their Agriculture Ministry, Ukraine has exported 3.83 mmt of grain so far in the 23/24 (July – June) season, which includes 1.6 mmt of wheat. They did not offer any comparison to this time frame last year.
- The EU’s export season began July 1st. Since that date, their soft wheat exports have reached 4.06 mmt as of August 20th, versus 5.12 mmt this time last year, a 21% decrease.
- Argentina’s wheat crop is rated only 20% good to excellent as of last week, due to serious drought conditions. With dryness persisting, it could mean additional downgrades to condition to come.
- Stats Canada will release their crop production estimates this coming Tuesday, August 29th. The average pre-report estimate of spring wheat production is pegged at 23.1 mmt, which compares to 25.68 mmt in 2022.
- Despite making a new near term high today, the US Dollar Index has since faded back, and this eased some pressure on commodities. Nevertheless, it remains near an eleven-week high and if the uptrend continues, it will also continue to keep pressure on prices.
- The spot cheese block/barrel average price is down 7c so far this week and closed Wednesday at $1.8475/lb.
- Although the July milk production report showed production growth down 0.50% in the US, the futures market is still sluggish at this time.
- Spot powder is down another penny this week and currently sits near its lowest level since 2021.
- Wednesday’s US cold storage report showed July cheese stocks fell 2% from a year ago while butter stocks rose 5% from a year ago.
- All 2023 class III milk contracts have fallen below the $18.00 threshold except for September, which closed Wednesday at $18.39.
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