CORN HIGHLIGHTS:

• The corn market saw some follow-through buying strength and short covering from yesterday. Futures rallied higher for most of the session, but resistance at 420 on the December chart held, and late softness in the wheat market allowed corn futures to slide off session highs. The direction of trade on Wednesday may be key for the end of the week.
• This morning the USDA announced a flash sale of corn totaling 200,000 mt (7.9 mb) for the 24/25 marketing year. This is the second consecutive day with a posted flash sale. On Monday, Mexico bought 5.2 mb of new crop corn.
• On Monday afternoon’s Crop Conditions report, the USDA reported that the corn crop’s condition was 67% good to excellent, down 1% from last week and below market expectations. Within the numbers, the key corn producing states of Iowa, Illinois, and Indiana saw crop ratings improve by 1-2% over last week. The overall strong crop rating keeps thoughts of an above average trendline yield in focus for this fall.
• Weather forecasts going into the end of July are turning less friendly for crop development in the first part of August as temperatures trend warmer than average, with normal to below normal moisture. While most of the corn crop is in good condition, in some areas, weather will still play a key role in finishing the crop into harvest.

SOYBEAN HIGHLIGHTS:

• Soybeans closed higher for the second consecutive day as buying momentum continued, but prices did retreat from midday highs as they were met by resistance at the 20-day moving average. After last week’s selloff, this week’s higher prices may also be encouraging some farmer selling. Soybean meal ended the day lower while soybean oil was bear spread with front months ending lower and deferred contracts higher.
• Yesterday’s Crop Progress report showed the good to excellent rating for soybeans staying stable at 68%, but as in corn, there were improvements in the heart of the Corn Belt while conditions slipped on the fringes. 29% of the soybean crop is setting pods which compares to 18% last week and 65% is blooming which compares to 51% last week.
• The 6–10-day forecast shows temperatures above normal while precipitation looks to be above average as well for the central and eastern Corn Belt. The extended forecast is drier for the majority of the Corn Belt which should be supportive going into pod fill.
• Yesterday’s Export Inspections report showed 12.0 mb of soybeans inspected as of July 18 which brought total inspections for 23/24 to 1.556 bb which was within trade expectations but is down 16% from the previous year. Cheaper prices may be helping US soybeans be more competitive globally.

WHEAT HIGHLIGHTS:

• Wheat closed lower across the board after a positive start to the session, and a lower close for Matif wheat provided no support. The recent rally over the past couple of sessions may have been primarily technical in nature, indicating that fundamentals might not support significant upward price movement.
• According to the USDA, winter wheat is 76% harvested as of July 21, up from 71% a week ago. This compares with 65% last year and 72% on average. The spring wheat crop was rated 77% good to excellent, unchanged from the previous week, but still well above the 49% rating from a year ago. Additionally, 89% of spring wheat is headed compared to 92% last year and 90% average.
• SovEcon this morning increased their estimate of Russia’s grain production by 3 mmt to 130.5 mmt, but wheat production was only increased 0.1 mmt to 84.3 mmt, just above the USDA’s 83 mmt figure. Russia also continues to be dominant on wheat exports, with their latest FOB values said to be around $218 to $200 per mt.
• Agriculture and Agri-Foods Canada projected Canadian 24/25 all wheat production at 35.43 mmt, which compares with 31.95 mmt the year prior. The USDA currently estimates the Canadian crop at 35 mmt. However, the warmer and drier conditions affecting wheat growing regions of Canada may warrant reductions to those estimates down the road.
• Following a couple of weeks of good rainfall, western Australia may see higher grain production. According to the Grain Industry Association of Western Australia, wheat, barley, and canola crops could be boosted by as much as 10%, reaching 18 mmt if current weather patterns continue. This new estimate compares with the previous estimate of 16.3 mmt. Wheat, in particular, is expected to see a 12.3% increase from the previous estimate, rising to 10.5 mmt.

DAIRY HIGHLIGHTS:

• Class III futures were higher on the day thanks to a strong spot session for cheese. October, November, and December were able to trade into new contract highs.
• Spot cheese improved 4.50 cents to $1.9450/lb led by blocks which were up 5.50 cents while whey improved half a cent to $0.53/lb for its highest level since February.
• Class IV futures finished in the green today trading 1-13 cents higher. The 2024 Class IV average was able to tack on 3 cents to close at $20.79/cwt.
• Spot butter went unchanged on Tuesday at $3.0750/lb. Spot powder increased 2.25 cents to $1.22/lb breaking above the key resistance level of $1.20/lb.
• The USDA’s Milk Production report for the month of June showed a drop of 0.80%.

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Author

Amanda Brill