CORN HIGHLIGHTS:

• Strong buying across the grain markets led by soybeans helped push corn futures to new highs during the session. A larger than expected drop in soybean rating, strong move in energy prices, and friendly EPA news triggered the buying support. December corn added 8 ¼ cents to 546, while March futures gained 8 cents to 560 ¼.
• On Monday afternoon, the EPA granted the small refinery exemptions for 2025 but looked to reallocate them in a later time window was deemed friendly for biofuels in the long-term. This added support to corn and the soybean oil markets.
• An increase in hostilities between the U.S. and Iran pushed crude oil futures 3-5% higher on front-end contracts as front-month crude oil futures push back to the $90/barrel price level.
• USDA weekly crop rating for corn remained unchanged from last week at 57% good to excellent.  Soybean rating dropped 2% to 58% G/E, 2% below the 5-year average and down 7% from last year.  The weakened soybean rating triggered strong buying support, which spilled over into the corn market.
• Above-normal temperatures and mostly dry conditions across the Corn Belt are pushing the crop toward maturity at a faster pace. Poor finishing weather could reduce yield potential as unfavorable conditions during grain fill limit kernel development.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day sharply higher making new contract highs once again as fighting between Russia and Ukraine escalated and caused further damage at ports in the Black Sea region. This caused crude oil prices to spike sharply, which supported soybean oil, but meal had significant strength as well. A decline in crop ratings was supportive to the soy complex as well.
• November soybeans gained 29-3/4 cents today bringing them to $13.17-3/4 and over the $13 mark for the first time in contract history. March soybeans gained 28-1/4 cents to $13.37-1/4, October soybean meal gained $7.10 to $345.70, and October soybean oil gained 1.62 cents to 72.45 cents. Crude oil surged higher and is up $4.78 a barrel to $90.51 a barrel.
• The USDA’s Crop Progress report saw soybean ratings fall by 2 points from last week to 58% good to excellent. This is down 7% from a year ago at this time. 95% of the soy crop is setting pods and 13% is dropping leaves. There is a chance that the USDA reduces the soybean yield in this month’s WASDE report.
• This morning, private exporters reported a sale of 136,000 metric tons of soybeans to China for the 26/27 marketing year. They have been making consistent purchases, and President Xi is scheduled to visit the US later this month.

WHEAT HIGHLIGHTS:

• Wheat closed with modest gains, but off of sessions highs. The rally may have been limited by the firming US Dollar Index. Support spilled over from sharply higher soybeans and MATIF wheat futures. In the December contract, Chicago gained 8-1/2 cents to 782-1/2, Kansas City climbed 7-1/4 cents to 845-1/4, and MIAX rallied 13-3/4 cents to 767-3/4.
• Yesterday afternoon’s USDA crop progress report indicated that the spring wheat crop is 77% harvested as of August 30. That represents an increase of 15% from the previous week. This is also well above last year’s 69% pace and the five year average of 68%.
• ABARE increased their estimate of Australia’s 26/27 wheat crop production by 3 mmt to 29.9 mmt. This increase is said to be due to recent beneficial rains. Nevertheless, if this forecast is accurate, it would still be down 17% from last year’s 36 mmt crop. For reference, the USDA is using a 28 mmt production figure for the Australian 26/27 wheat crop.
• Ukraine is reported to have harvested 32 mmt of grain so far this season, on 58% of the planted area. When complete, they expect to harvest 60 mmt of grain. Wheat specifically has been collected on 5 million hectares, with volume totaling 24.76 mmt. Average wheat yield sits at 4.92 mt/hectare.
• According to the Kazakhstan grain union, their nation exported 8.3 mmt of wheat in September to July of the 25/26 marketing year. This is up 15.7% year over year, and is also a new record total. During the same timeframe, they imported 1.92 mmt of Russian wheat, which is 5.9x more than a year ago.

DAIRY HIGHLIGHTS:

• A 2c lower close for cheese took the US block/barrel average down to $1.50375/lb, pressuring Class III Tuesday.
• The Global Dairy Trade cheese price fell 6.60% and hit a new 5-year low.
• Class IV remains strong, with contracts inching up to near $20.00/cwt. GDT skim milk  powder hit a multi-year high while the US spot trade is higher.
• Most nearby Class III contracts closed double digits lower. The futures market remains a bit overpriced when compared to the current spot trade levels.
• Today was the last trading day for August dairy futures. Official settlements will be released tomorrow and September will now move into the front month spot.

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Author

Amanda Brill