Corn market slides lower
It was a very quiet week for the corn market during the last full week of October. Lack of new bullish news paired with suspected farmer selling kept front month December futures within a 10-cent range all week. Front month December corn was 4-1/4 cents lower for the week, closing at 386-3/4. July corn finished at 409-3/4, down 5-1/2 cents for the week. In the last two weeks, the corn market has drifted sideways to lower posting at most a 4-1/2 cent move either direction. The grind lower has pulled us just over 15 cents off of our most recent high of 402-1/2 which came last Monday the October 14. With a majority of corn harvest still in front of this market yet, the bleed lower may continue, in the short term, as harvest pressure increases. Corn harvest was predicted 30% complete across the U.S. as of October 20.
Prospects for this corn crop to dry down do not look all that promising in the coming week and a half. The 6-10-day NOAA outlook calls for much below-normal temperatures centered in the heart of the country with slightly below-normal precipitation in the western Corn Belt and slightly above-normal precipitation in the eastern Corn Belt.
Soybeans grind lower, await fresh trade news
Soybean futures were down this week across the board. November beans closed at 920-1/4 down 13-3/4 cents on the week. After trading mostly unchanged all week, soybean futures had a tough Friday session posting double-digit losses. Soybeans appear to be at a crossroads here waiting for new news regarding a potential trade deal with China. Prospects for a deal hinge upon a meeting in Chile between the two countries in mid-November. Rumors for Chinese purchases of $50 billion in U.S. agricultural products have been tossed around but any sort of major follow through has yet to materialize. On Friday, U.S. Trade Representative Robert Lighthizer stated that the U.S. and China have been speaking this week. The press release stated the two counties have “made headway on specific issues and the two sides are close to finalizing some sections of the agreement.”
The U.S. soybean harvest pace made a major improvement in the last week. As of Sunday, harvest was seen at 46% complete vs the 5-year average of 68%.
Chicago Wheat backs off recent highs
Wheat futures across the board were down this week with Chicago wheat leading the losses. An early week reversal in the U.S. dollar following unfavorable news on the Brexit front proved to be a headwind for the wheat market. December Chicago wheat closed at 517-3/4, down 14-1/2 cents on the week. December KC wheat was down 11 cents on the week to close at 422-3/4. December Minneapolis spring wheat closed at 536-3/4, down 7-3/4 cents on the week. Export sales on Thursday were less than supportive coming in at 262,400 tonnes for the current marketing year and no sales for the next marketing year. As of October 17, cumulative wheat sales stand at 54.5% of the USDA forecast vs a 5-year average of 61.3%.
Cheese Prices Finish the Week at the Highest Level of 2019
The spot cheese market was led higher by the cheddar barrels on Friday as buyers pushed the price up 5 cents to settle the week at $2.25/lb. Nine loads were traded on the day and these were the first loads traded on the week. It is somewhat reassuring to see the barrel market having loads trade hands at these elevated levels after seeing the barrel market rally over 10 cents without a single trade taking place. The block/barrel average closes the week 20.25 cents higher overall at $2.18625/lb. The whey market continues to struggle, trading near the 2019 lows at $0.2825/lb. The last three weeks spot powder has closed at new highs for 2019 but the market couldn’t keep it together for a fourth consecutive week. Powder lost 1 cent on the day to finish at $1.1525/lb. Butter bounced slightly off of the 2019 low of $2.0575/lb to $2.06/lb.
Class III futures traded slightly higher today with the November contract settling at $19.55. The November contract becomes the front-month contract next week and it appears that November will attempt to be the first contract to settle above $19.00 this year. Official settlement for October milk looks like it will come in at about $18.65. The large spread between Class III and Class IV prices is growing with the November contract for Class III at $19.55 and Class IV at $16.55, a three dollar difference.