- Quiet price action is the norm in the corn market as Dec corn faded to a 2-½ cent loss on the day but closed the week higher, gaining 2 ¼ cents. The overall lack of news and anticipation of next Tuesday’s USDA report had prices consolidating this week, looking for direction.
- Weekly export sales are still disappointing overall. Old crop sales at the end of the marketing year saw new cancellations of 15,000 mt with any undelivered sales likely rolling into the new marketing year. New crop sales were 1.78 mmt, or 37.4 million bushels. The current book of new crop sales is the fourth worst for corn in the past 10 years as the U.S. struggles against foreign competition.
- Early harvest could keep pressure on the corn market. Forecasted wetter weather in the West could slow movement, but basis could fade as fresh bushels are moved into the cash market.
- Next week’s USDA report will be looking at crop production and likely making demand adjustments. Expectations are for yield to be lowered to 173.5 bushels/acre from 175.1 last month. If the USDA makes potential demand adjustments, forecast carryout could still be over 2.0 billion bushels.
- Corn prices have been trading in a sideways, consolidative pattern since mid-August. The narrowing, choppy pattern may be setting the market up for a break in either direction, likely triggered by the reaction to the report on Tuesday next week.
- Soybeans ended the day higher while products were mixed. Soybean meal maintained its momentum and closed higher, while soybean oil continued to be dragged lower by falling palm oil prices despite tight supplies.
- Trade in the grain complex has been relatively quiet ahead of Tuesday’s WASDE report in which yields, planted acres, and ending stocks will be revised. Most analysts are expecting yields to be lowered, but there is potential that acreage will be increased.
- Export sales were released from last week and showed an increase of 5.7 mb for 22/23, and an increase of 65.5 mb for 23/24, a good number. Last week’s export shipments of 44.9 mb were solid and produced total shipments for the 22/23 marketing year of 1.992 billion bushels, which was above the USDA’s previous estimate of 1.980 bb.
- There has been some concern regarding China’s economy after reports were released showing that China’s total imports were down by 7.3% in August. This is in contrast with China’s soybean imports which were up by 31% from a year ago but have mostly been supplied by Brazil. There have been rumors that China may be picking up 6 to 8 cargoes of U.S. soybeans for November shipment.
- The USDA reported an increase of 13.6 mb of wheat export sales for 23/24 and an increase of 0.4 mb for 24/25. Last week’s export shipments were 11.6 mb and below the 14.0 mb needed.
- Rain is in the forecast for the southern Plains and into southern Nebraska for this weekend and into next week. Amounts are expected to be favorable and should be beneficial for winter wheat planting conditions.
- Not many changes are expected in Tuesday’s WASDE update. The average trade guess for U.S. carryout is 613 mb, down 2 mb from last month, and the average guess for 23/24 world carryout is 265 mmt, 600k lower than last month.
- Statistics Canada released its estimate for Canada’s all wheat stocks as of July 31, and it came in at 3.584 mmt, below last year’s 3.663 mmt and the average trade guess of 4.0 mmt.
- The BAGE updated its estimate for Argentina’s wheat crop at 16.5 mmt versus 12.2 mmt for last year. The USDA is currently estimating the crop at 17.5 mmt.
- Spot cheese prices fell sharply on Friday, down nearly 4 cents per pound, pressuin
- For the first time since April, Class III is now at a premium to Class IV on the second month contract on a weekly close.
- Open interest in Class III futures is at its lowest level since March of 2020.
- Dairy cow culling for week ending Aug 19th was +1.2% YoY.
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