CORN HIGHLIGHTS:

• Another quiet day overall in the corn market as corn prices were trapped between a weak soybean market and buying strength in the wheat markets. May futures had a tight 5 ½ cent trading range on the session as prices continue to consolidate.
• Weekly corn inspections toted 48.8 mb in another good week. Total corn inspections now total 909 mb, up 31% from last year. Current US corn export inspections are above the USDA’s estimated pace, which is forecasting a 26% rise over last year.
• Strong selling in the Brazilian corn futures market limited gains in US corn prices. Brazilian May corn futures contract was 2.5% lower on the session with improved rain chances in the near-term forecasts.
• Strong planting pace for the second crop Brazil corn crop is a limiting factor with the prospects of a longer growing season. AgRural estimated that 97% of the Brazil’s 2nd (safrinha) corn crop is planted, up from 93% last week and 91% from last year. Weather will remain a strong focus of the market over the next couple months as the crop develops.
• Managed hedge funds continue to lighten up on their short position in the corn market. It was still historically large overall, but funds exited 40,867 net short contracts on last week’s Commitment of Traders’ report.  As of Tuesday, March 12, funds are still holding a net short position of 255,982 contracts.

SOYBEAN HIGHLIGHTS:

• To kick off the week, soybeans closed firmly in the red, brought lower by both soybean meal and oil along with an uptick in Brazilian farmer selling. Export inspections were in line with expectations but did nothing to support futures.
• Export inspections today came in at 25.2 mb for the week ending Thursday, March 14. This was within analysts’ expectations and were above the 15 mb needed each week to meet the USDA’s forecast. Total inspections for 23/24 are at 1,314 mb, which is down 19% from last year.
• South American weather is expected to improve with central Brazil already receiving beneficial rains in Mato Grosso with more rains forecast later in the week for southern Brazil and Argentina. Brazil is reportedly 63% complete with harvest but there is still a large discrepancy in production estimates between CONAB and the USDA, with the USDA’s projection nearly 10 mmt higher.
• Friday’s CFTC report showed funds buying back soybeans but not in the same numbers as they did corn. They covered 16,862 contracts which leaves them net short 155,137 contracts and no longer holding a record short position.

WHEAT HIGHLIGHTS:

• Wheat closed higher across the board today and with double-digit gains for Chicago futures. Support came from higher Matif futures, as well as media reports that 16 Russian drones attacked the Odesa region in Ukraine, damaging ag infrastructure and again increasing tensions. This is reportedly in retaliation for recent Ukraine attacks on Russian oil refineries.
• Weekly wheat export inspections of 11.1 mb bring the total 23/24 inspections to 505 mb. That is down 16% from last year, with inspections running below the USDA’s projected pace. On the last WASDE report, the USDA reduced their wheat export estimate from 725 to 710 mb.
• Cheap Black Sea wheat may keep the lid on US futures for now. According to SovEcon, Russian exports of grain may reach 5.8 mmt in March, compared to 4.9 mmt in February. Additionally, Ukraine’s wheat exports since last July have totaled 12.9 mmt, which is a 5% year on year increase.
• The European Union is apparently considering restrictions on the import of ag goods from Russia in an effort to pressure the Kremlin. It is believed that transport through the EU to other countries will not be restricted, however.
• From March 6 to March 12, managed funds net sold 13,331 contracts of Chicago wheat to bring their total net short position to 78,870 contracts. That is a 20.3% increase and also a three-month high. It is possible that some of today’s positive price action was a result of funds covering some of those short positions.

DAIRY HIGHLIGHTS:

• Spot cheese was overall higher today thanks to a solid blocks trade, bringing the average to $1.4750/lb. Barrels are back to a 5 cent premium over blocks.
• Class III futures were mostly higher on Monday’s action with the second month April contract up 15 cents to $16.16.
• While butter fell a quarter cent, spot powder dropped 1.75 cents today to a 6-month low at $1.1450/lb. The fact that it is breaking out of the range to the downside brings concern on the direction for Class IV.
• Class IV futures were mixed but did not deviate much from Friday’s close. The 2024 average finished at $20.36.

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

John Heinberg