September 9th, 2022
Strong Week for Dairy
The second month Class III chart is testing a break above $21.00 again, as the October contract added 99 cents this week. It’s Class IV counterpart was no slouch with a gain of 77 cents in the first full week of September with a $24.40 close, keeping a large premium intact. It was a big week in the spot markets with the block/barrel average up more than 11.00 cents to push to a seven-week high. Meanwhile, spot butter traded to a new all-time high at $3.17/lb on a 7.00 cent gain as powder continued its recovery with a 5.50 cent jump. On Monday, the USDA will release the September WASDE report, which is likely to add fuel to the volatile grain/feed markets, but otherwise it will be a quiet week for fundamental updates.
- So far, the $1.80/lb level has held as support for the block/barrel average after serving as resistance multiple times in 2021
- Butter’s move to all-time highs has come with a strong fundamental backing as July exports (released Wednesday) were once again a record at 7,483 tons
- Front month soybean meal futures have been down four weeks in a row with October futures closing at $414.80/ton today
Corn Reverses Early Losses
- December corn futures were up 19.25 cents on the week to close at $6.85, an 11-week high
- The average yield estimate for Monday’s WASDE report is 172.5 bpa, down from 175.4 bpa on August’s report
- The average estimate for 2022/23 ending stocks is 1.217 billion bushels, down from 1.388 bb last month
- Brazil and Argentina saw sufficient precipitation over their winter, but La Nina concerns have been in the headlines as they begin planting
- Brazilian corn exports are expected to hit 6.310 million metric tons in September, a notable increase from 2.546 mmt in the same month last year
- The White House said it sees no indication that the Ukraine grain export deal will falter, countering comments made by Putin that had the markets jumpy
Soybean Meal Lower on Week
- October soybean meal futures fell $9.20/ton this week with a close at $414.80
- The average soybean yield estimate for Monday’s WASDE report is 51.5 bpa, down from 51.9 bpa on August’s report
- The average estimate for 2022/23 ending stocks is 247 million bushels, up from 245 mb last month
- China imported 7.17 million metric tons of soybeans last month, down 24.5% YoY and down 9.0% from July
- The USDA announced a private sale of 104,000 metric tons to Taiwan for the 2022/23 marketing year today
Friday’s Market Quotes
Author
Dustin Jonasson