CORN HIGHLIGHTS:

• Corn futures fought off session lows and selling pressure from the wheat market to finish slightly higher on the session. Technical support and a possible hotter forecast may have helped bring some buying into the oversold corn market.
• Friday’s USDA crop production numbers remain bearish even with the reduced yield, as demand cuts keep carryout over 2 billion bushels, which indicates an overall potential heavy corn supply picture.
• Weekly export inspections were within expectations at 15.7 mb last week. Total corn inspections are slightly behind the pace to reach the USDA marketing year target, and down 33% from last year with the marketing year ending on August 30.
• December futures held the July 13 low of $4.81 during the session, which may have led to some technical buying and short covering. The key will be additional strength and follow through to establish a possible short-term uptrend.
• With favorable weather recently, weekly crop ratings are expected to rise by 1% nationally to 58% on the USDA Crop Progress report on Monday afternoon.

SOYBEAN HIGHLIGHTS:

• Soybeans began the day higher along with both soybean meal and oil and ended slightly below the highs of the day following Friday’s friendly USDA report and a bullish weather forecast.
• While the past few weeks have provided good and necessary rains over most of the Midwest, the forecast has changed and now shows very dry and hot conditions that are expected to last through the month and possibly into September.
• Possibly the most supportive news today was the report of a sale of 416,000 mt of new crop soybeans to unknown destinations for 23/24. This comes following a string of recent sales to China and unknown destinations and is encouraging for demand.
• To recap Friday’s WASDE report, the USDA dropped soybean yields by 1.1 bpa to 50.9 bpa and dropped new crop ending stocks by 55 mb to 245 mb which is very tight. Export estimates were also dropped to account for the anticipation of the smaller crop.

WHEAT HIGHLIGHTS:

• Despite more tension in the Black Sea, wheat closed lower today. Over the weekend it was reported that there were Ukrainian drone attacks on Moscow, as well as a Russian oil tanker. Russia is said to have also fired warning shots at a boarded private vessel.
• Ukraine has reportedly started to register vessels that are willing to use their “humanitarian corridor”. This goes directly in the face of Russia’s statement that they would treat any civilian ships in the Black Sea as carrying military cargo, making any trip dangerous. In any case, it could mean that more grain shipments will make their way out of Ukraine.
• Weekly wheat export inspections were poor at 6.7 mb, roughly half of what is needed weekly to reach the USDA’s 700 mb estimate for 23/24 and bring total 23/24 inspections to 118 mb.
• Last week the USDA increased their estimate of Russian 23/24 wheat exports to 48 mmt. However, they also said that global inventories will decline to the lowest level since 15/16.
• The U.S. Dollar Index is continuing to trend higher and kept pressure on wheat today. The index did run into resistance at the 200-day moving average of 103.48, and though it has not been above that average since December of 2022, if it continues to move higher it will further hamper the export market.

DAIRY HIGHLIGHTS:

• Just 610 contracts traded hands in the 2023 Class III milk strip on Monday as light trade continues to keep the dairy market flat.
• Front month August Class III fell 5c to $17.27, while September lost 15c to $17.83.
• Just 5 August Class IV contracts traded hands, while September ’23 through July ’24 saw no trades. August fell a penny to $18.94.
• The market appears unwilling to push Class III futures any higher despite the fact that the block/barrel average now holds over $1.90/lb.
• There is a Global Dairy Trade auction event tomorrow that will have the market’s attention. Recent events have been disappointing as global markets struggle.

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Author

John Heinberg