CORN HIGHLIGHTS:

• Buying strength moved into the corn market on Wednesday as prices held recent lows, triggering some short covering and position squaring before Thursday’s USDA Crop Production Report. Strong buying strength in the wheat markets helped support corn futures.
• On November 9, the USDA will release the next Crop Production Report. Analyst expectations are for the USDA to slightly increase corn yield to 173.2 bushels/acre, which could add bushels back to an already heavy supply picture with a projected carry out increase to 2.129 billion bushels. Adjustments to harvested acres could be an unexpected number.
• The USDA will release weekly export sales on Thursday morning. Expectations for new 23/24 marketing year sales range from 600,000-1.2 mmt. USDA announced a flash sale of corn to Mexico for 270,000 mt (10.6 mb) for the current marketing year.
• South American weather stays in focus. Current weather models are leaning toward warm and dry conditions continuing into the end of the year. At this point, the weather is likely more supportive of the soybean market, but potential delays or loss of production in the second crop corn in Brazil could support corn prices in the late summer with possible improved late season demand.
• A sharp drop in crude oil prices can limit gains in the corn market. Ethanol margins have been favorable, but weaker energy prices will likely weigh on those margins. December crude oil has lost approximately $7.00 for the week and is trading at its lowest levels since July.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher but backed significantly off their morning highs which saw prices taking out yesterday’s high. Early support came from soybean meal which faded into the day, but soybean oil ended higher despite another selloff in crude oil.
• Following yesterday when China made its largest single day purchase of US soybeans in over three months, more large sales were reported today with 433,000 mt sold to China for the 23/24 marketing year, 132,000 mt sold to unknown destinations, and another 344,500 mt that were previously unreported but sold to unknown destinations.
• Brazilian weather has been a huge part of the recent rally in the soy complex with conditions in northern and central Brazil far too dry and impacting planting, while southern Brazil is still receiving large amounts of rain. Northern Brazil previously had some chances for scattered showers, but today the 10-day forecast turned hotter and drier. It is still early, but this trend could significantly impact South America’s crop.
• Tomorrow, the USDA will release their WASDE report, and although few changes are expected, some analysts are predicting a slight decrease in US yields. Last month the USDA pegged yields at 49.6 bpa with ending stocks of just 220 mb. It is unlikely that the ending stocks number will change by much.

WHEAT HIGHLIGHTS:

• After fading back off today’s highs, wheat still managed strong double-digit gains in both Chicago and Kansas City contracts. Minneapolis futures were also higher, but to a lesser degree. Support also came from a positive close in Paris Milling wheat futures.
• Tomorrow traders will receive the USDA’s monthly WASDE report. While there are no major changes expected for wheat, there may have been some short covering today. It is possible that the USDA will lower Argentina’s crop by 1-2 mmt due to the weather issues they faced. But there is also a chance that they will Raise both the Russian crop and exports.
• The average pre-report estimate for US 23/24 carryout comes int at 670 mb which is unchanged from October. For the world ending stocks, the projection is 257.9 mmt, down just slightly from 258.1 mmt last month.
• Ukraine’s agriculture ministry said their grain exports between July 1 and November 6 are at 9.8 mmt, down from 14.3 mmt for the same time period last year. The European Union’s soft wheat exports also dropped 25% between July 1 to November 2, to 9.95 mmt versus 13.2 mmt a year earlier.
• According to Sergi Lavrov, the Russian foreign minister, there has been no progress to revive the Black Sea Grain Initiative. This is despite efforts by the United Nations to broker a deal.
• Egypt has seen weakness in their currency, with the Egyptian pound said to have dropped 49% versus the US dollar since 2021. This has reportedly reduced wheat imports by roughly 10 mmt over the past couple years. Additionally, Russia will not accept Egyptian pounds in exchange for wheat.

DAIRY HIGHLIGHTS:

• Spot cheese was mixed with blocks losing 6.75 cents while barrels gained 7.50 cents. The block/barrel spread has narrowed in recent weeks and currently sits at $0.0100/lb.
• Spot whey rose 0.75 cents on 2 loads traded to improve to $0.3925/lb on the week.
• Class III prices were pressured early on before rebounding to gain those losses back heading into the close. The 2024 Class III average closed at $18.24/lb.
• Spot butter fell 10 cents on two loads traded to close at $2.7975/lb. This represents a 31-cent loss over the last week so far. Spot Powder improved a penny to $1.1800/lb.
• Class IV prices were moved little on the day with light volume. January futures saw the largest loss of 10 cents to close at $18.64 while the 2024 Class IV average closed at $19.43.

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Author

John Heinberg