CORN HIGHLIGHTS:

• The corn market remained quiet on Tuesday, trading within a narrow 4 ½ cent range. After a day of two-sided activity, the session ended with slight gains. With little news driving movement, the market appeared to be taking a breather ahead of the Federal Reserve meeting and potential interest rate cuts expected on Wednesday afternoon.
• Harvest activity continues to pick up, which is limiting price gains. As of September 15, 9% of the corn crop had been harvested, ahead of the 5-year average, according to the USDA’s crop progress report on Monday afternoon. The crop condition was rated 64% good to excellent, surpassing expectations. While corn condition is less of a market factor as the crop nears maturity, it remains in historically strong shape for September.
• Brazil’s Ag Ministry, CONAB released its projections for the 24/25 corn marketing year. Brazil is expected to produce 119.78 mmt of corn in the next crop year. This is up 4.1 mmt or 3.6% over last year.
• US weather is likely to remain drier than normal with above normal temperatures, which should help push the corn crop to maturity and speed up harvest. Harvest pressure going into October and November will likely limit upside potential in corn prices.

SOYBEAN HIGHLIGHTS:

• Soybeans managed to end the day slightly higher after trading on both sides of unchanged throughout the day. Crop conditions fell slightly from last week but were in the range of analysts’ expectations. Although the USDA did not lower soybean yields in its most recent report, it is likely that the recent stretch of dry weather has reduced yield potential slightly. Soybean meal ended the day lower while soybean oil was higher.
• Yesterday’s Crop Progress report showed the good to excellent rating for soybeans slipping by one point to 64% as trade expected, but it still well above last year’s 52%. 44% of the crop is dropping leaves, which compares to 25% a week ago and 6% of the crop is harvested. Illinois and Iowa had the highest crop ratings at 72% and 77% respectively.
• This morning, CONAB released its new estimates for the 24/25 soybean crop and raised the number to a record large 166.3 mmt which would compare to 147.38 mmt the previous year. However, conditions have been dry, and late planting could impact yields if rains do not fall in the beginning of October like they have been forecast to do.
• Yesterday’s NOPA crush report was bearish and showed August crush totals falling to a nearly 3-year low of 158.008 million bushels, while soybean oil stocks fell to a 10-month low of 1.138 billion pounds. Both soybean crush and stocks were well below the average trade estimates.

WHEAT HIGHLIGHTS:

• Wheat ended the session with a mixed close. Chicago futures posted small losses, Minneapolis small gains, and Kansas City was on both sides of unchanged. Early strength faded as the US Dollar Index shifted from lower to higher, perhaps in anticipation of tomorrow’s conclusion to the FOMC meeting. The Fed is expected to cut interest rates, but many are questioning whether it will be a 25 or 50 basis point reduction.
• According to the USDA, as of September 15, 92% of the US spring wheat crop has been harvested. This is just above the average of 90% and last year’s 91% pace. Additionally, they reported that the US winter wheat crop is now 14% planted, which is 1% above both last year’s pace and the 5-year average.
• Most of the Midwest remains warm and dry. However, later this week and into next week, rains are expected to move into the Corn Belt and central Plains, with totals ranging from 1.5 to 3 inches. This rainfall may help recharge soil moisture and improve conditions for the establishment of the winter wheat crop.
• The French agriculture minister has reduced the soft wheat production estimate by 0.5 mmt to 25.85 mmt, which is approximately 27% lower than last year’s total. The decline is attributed to unfavorable weather, which led to reduced yields and a smaller planted area. Meanwhile, SovEcon increased its estimate for Russian wheat production by 0.4 mmt to 82.9 mmt, which aligns closely with the USDA’s figure of 83 mmt.

DAIRY HIGHLIGHTS:

• Today was the final Global Dairy Trade auction event of September which saw an improvement of 0.80%. This helped to build some momentum in dairy prices.
• Class III futures were green across the board led by the December contract which gained 34 cents to close at $22.04 on the day.
• Spot cheese continues its impressive run, now trading higher than the 2022 high at $2.42125/lb after 8 trades loaded on the day.
• Spot whey continues to stay elevated gaining 0.50 cents to $0.5950/lb.
• Class IV futures were lackluster on low volume trading for 2024 contracts. The October futures contract saw just 1 trade to improve 2 cents to $22.74.
• Spot butter improved 1.50 cents to $3.0850/lb while powder gained just 0.25 cents to $1.3925/lb.

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Author

John Heinberg