CORN HIGHLIGHTS:

• Short covering and improved export demand may have helped corn prices push higher for the 3rd straight session. December corn futures closed at its highest level since July 29, as the market posted a 24-cent rally off the most recent 385 low.
• The corn market saw good follow-through buying after last week’s improved technical picture. The December contract posted a double bottom at 385 and completed a weekly reversal in last week’s trade. The rally could be limited by weakening basis, farmer selling, and higher prices acting as a cap on demand.
• The USDA released weekly export inspections during the session this morning. Last week, US exporters shipped 38 mb (965,000 mt). This brings total inspections in 23/24 to 2.049 bb, up 40% YOY.  The USDA was targeting a 34% increase, as late season demand has helped push this total.
• Export sales for corn have improved over the past couple of weeks as lower prices have stimulated some demand. Current accumulated sales for the 24/25 marketing year have caught up with the projected export sales pace. New crop sales at a cumulative 9.4 mmt, as of August 22 covered 16.1% of USDA’s 24/25 export forecast, which is a three-year high for the date.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher after a day of tumultuous trade which saw prices down as much as 5 cents and up as much as 24 cents in the November contract. The catalyst for today’s move was likely weather driven as the most recent forecasts are showing dry weather for the next two weeks with temperatures on the cooler side which could cause soybeans to start maturing early.
• Soybean meal ended the day significantly higher, while soybean oil took the opposite stance under pressure from Canadian canola oil. In retaliation to tariffs on Chinese electric vehicles, China opened an anti-dumping investigation against Canadian canola. Crude oil was sharply lower today as well, after Saudi Arabia was rumored to be offering oil to China at a cheaper price.
• In more supportive news, the USDA reported private export sales this morning totaling 4.8 mb (132,000 mt) of soybeans for delivery to China during the 24/25 marketing year. China has increased their purchases of US soybeans recently which has confirmed some of the trade rumors.
• Friday’s CFTC report showed funds as buyers of soybeans as of August 27, as they bought back 6,207 contracts leaving them short 176,551 contracts which is close to their record short.

WHEAT HIGHLIGHTS:

• Wheat closed higher in all three US classes. Support came from higher corn and soybeans, as well as a mostly higher close for Paris milling wheat futures. With the exception of the front month September contract, Paris milling wheat futures averted losses for the sixth consecutive session. There is also supportive news that SovEcon decreased their estimate of Russian wheat production by 0.8 mmt to 82.5 mmt, compared to the USDA at 83 mmt.
• Weekly wheat inspections at 21.2 mb bring total 24/25 inspections to 211 mb, which is up 32% from last year. Exports are estimated at 825 mb, up 17% from last year, and inspections are running above the USDA’s estimated pace.
• There was talk that large managed funds today may have been selling stock positions, while buying commodities. This could help explain today’s action in the grain markets, with sharply higher closes in corn, soybeans, and wheat. At the time of writing, the stock market is sharply lower with the Dow down over 550 points, the NASDAQ down nearly 600 points, and the S&P 500 down over 100 points.
• ABARES, which is Australia’s ag bureau, increased their projection of the Australian wheat crop by 2.7 mmt to 31.8 mmt. This would be 6 mmt above last year’s production and above the USDA’s estimate of 30 mmt.
• Ukraine’s grain exports have reportedly reached 7 mmt since the season began on June 1. This represents a 63% increase from 4.3 mmt last year. Of that total, wheat exports were 3.6 mmt, which is up 89% year on year. Additionally, Ukraine has reportedly resumed agreements with traders, setting a target of 16.2 mmt for wheat exports in the 24/25 season.

DAIRY HIGHLIGHTS:

• Class III milk futures were strong coming out of the long weekend with October leading the way higher with a finish at $23.25, up 38 cents from Friday.
• Spot cheese was quiet with blocks up a half cent and barrels unchanged. Spot whey gained a penny to close at $0.57/lb.
• Class IV milk was mixed with August and September futures lower and the November contract up a nickel.
• The spot trade for the Class IV products was mixed with butter down 1.75 cents and powder up 1.25 cents.

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Author

Brandon Doherty