CORN HIGHLIGHTS:

• Corn futures finished slightly higher to start the week supported by light buying strength in the wheat market and overnight activity in the export market.
• Mexico purchased 155,000 mt (6.1 mb) for corn in an overnight flash sale. Mexico maintains itself as the top buyer of US corn for the 24/25 market year. This was the third published sale of corn posted in October.
• Harvest pressure will continue to limit the corn market’s rally potential. Last week, the corn harvest was 21% complete, but expectations are for that number to climb as the weather has been very favorable for harvest progress. The harvest pace will be updated on the USDA Crop Progress report to be released Monday afternoon.
• The weekly export inspections for corn were within analysts’ expectations. Last week, the US shipped 933,000 mt (36.7 mb) of corn. Early in the market year, exports totaled 168 mb, up 22% from last year and supportive in the corn market.
• Managed money has covered a large portion of its net short position in the corn market. In last Friday’s Commitment of Traders report, managed funds reduced their net short position to 68,000 contracts, trimming the position by 63,000 contracts as of October 1. Funds were net short 350,000 contracts in early July and have since removed nearly 300,000 of them.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day slightly lower but recovered from earlier morning lows. There has been some pressure lately from an improved Brazilian weather forecast and US harvest pressure, but a flash sale this morning likely added some support. Soybean meal ended the day lower while soybean oil was higher with support from higher crude oil.
• This morning, the USDA reported a private export sale totaling 172,500 metric tons of soybeans for delivery to unknown destinations during the 24/25 marketing year. This may be going to China despite the fact that they have been on their golden week holiday.
• Today’s export inspections report was solid for soybeans as they came in above the high end of trade estimates. Inspections for soybeans totaled 52.6 mb for the week ending October 3 and put total inspections for 24/25 at 125 mb, down 1% from the previous year. The USDA estimates soybean exports to be up 9% from the previous year.
• Friday’s CFTC report showed that as of October 1, funds bought back 40,092 contracts of soybeans, leaving them net short 40,092 contracts. In the past three sessions leading up to today, funds are estimated to have sold 3,500 contracts.

WHEAT HIGHLIGHTS:

• Wheat posted gains today in all three US classes. The market was aided in part by the US dollar index taking a breather from the recent strong uptrend. There was not much fresh major news to drive today’s higher trade, which may indicate that speculative buying also played a part.
• Weekly wheat inspections at 13.4 mb bring the total 24/25 inspections figure to 316 mb, which is up 35% from last year and running above the USDA’s forecasted pace. Additionally, US 24/25 exports are estimated at 825 mb, which is up 17% from the year prior.
• Weather-wise, Argentina has some rain in the forecast that should benefit its wheat crop. Elsewhere, Russia and Ukraine remain too dry overall, though a few showers in eastern Ukraine and western Russia have slightly eased drought conditions. Parts of Europe are also too wet, and Hurricane Kirk is headed that way. It will likely be downgraded to a tropical storm by the time it makes landfall but will still bring heavy rain to parts of France and Germany.
• It was reported today that a Russian missile hit a Ukrainian ship in the port of Pivdennyi over the weekend. While this particular vessel was said to be filled with corn, it still may have affected the wheat market as more war premium was factored in.
• According to IKAR, Russia’s wheat export price ended last week at $223 per mt, which would be up $1 from the week prior. Additionally, SovEcon reported that Russia shipped 870,000 mt of grain last week compared to 1.3 mmt the week before. Wheat, in particular accounted for 800,000 mt of the total and compares with 1.29 mmt the prior week.

DAIRY HIGHLIGHTS:

• Class III has struggled to find its footing amid the weakness in cheese. December futures closed 42 cents lower to $20.44 while the November contract lost 39 cents to $21.00.
• Spot cheese fell for a 12th consecutive day, falling to $1.94/lb. The whey market remains steady, trading at $0.6050/lb.
• Class IV futures were quiet with no trading volume for remaining 2024 contracts. The 2024 Class IV average sits at $20.79.
• Spot butter much like the cheese trade has been in a free fall since early September. Butter now sits at its lowest level since February at $2.7125/lb. The powder market has pulled back from its recent highs to last trade at $1.3550/lb.

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Author

Brandon Doherty