CORN HIGHLIGHTS:

• The corn market experienced follow through buying early in the session as traders sought to add weather premium on the warmer and drier extended forecast, but prices once again encountered overhead resistance around the 20-day moving average and sold off into the close. Selling pressure in neighboring soybeans also likely contributed to the soft tone.
• Weekly ethanol production dropped to 1.095 million barrels per day last week, down from 1.106 mil. barrels per day the week prior but came in above expectations and the third highest for this marketing year. 109.7 million bushels of corn were used in last week’s production, which was above the pace needed to reach the USDA’s projections.
• With Brazil’s second corn crop nearly harvested, their corn exports have begun to ramp up. According to Anec, the country’s corn exports for the month of July are expected to reach 4.56 mmt, a slight increase from last week’s projection of 4.51 mmt. That said, US export values out of the Gulf remain between $6 and $8 per mt below Brazil offers, which should help US corn sales.
• Due to the hot and dry conditions in the Black Sea region, SovEcon lowered their forecast for Russia’s corn production 8% to 13.4 mmt from 14.6 mmt in June. On a related note, it’s been reported that Ukraine’s 24/25 grain exports through July 24th are up 67% from last year to 2.78 mmt, 1.39 mmt of which is corn.
• Weather forecasts going into the end of July are turning less friendly for crop development in the first part of August as temperatures could trend well above average, with above normal moisture in the ECB to below normal moisture in the WCB. 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:

• After higher closes on Monday and Tuesday, soybeans ended the day lower. Despite higher trade this morning, futures traded lower into the end of the day after being rebuffed at their 20-day moving average, much like yesterday. Soybean meal ended the day slightly higher, while soybean oil was pulled down by palm oil.
• The weather has been very beneficial up until this point, but forecasts are turning dry and very hot heading into August which will be crucial for pod fill. Little impact is expected this week, but the GFS model shows temperatures potentially reaching as high as 113 degrees in some parts of the Midwest.
• Despite slow US soybean exports this year, with Brazil capturing 87% of China’s soybean imports, US soybeans are becoming more competitive. Expectations are rising that China will increase its purchases of US soybeans.
• Last Friday’s CFTC report revealed that funds held a record net short position in soybeans. However, this has likely changed due to this week’s rally, as funds probably covered some of that short position with dry weather in the forecast.

WHEAT HIGHLIGHTS:

• After a two-sided trade, Chicago and Kansas City wheat futures closed with small gains, while Minneapolis futures posted modest losses. The strength of the grain rally that started this week is fading, likely due to it being primarily a technical bounce. Additionally, Matif wheat’s inability to hold onto gains today added weakness to the US market.
• Outside markets may be influencing commodity prices. At the time of writing, the Dow is down over 400 points, the NASDAQ down over 650 points, and the S&P 500 down over 100 points. This broad-based selloff could be tied to uncertainty surrounding the US economy, especially given the recent news that President Biden has stepped out of the race.
• The first day of the US spring wheat crop tour found a yield in North Dakota of 52.5 bpa; this is higher than last year’s 48.1 bpa and the average of 42.2 bpa. In fact, this is the highest first day yield found since the tour began in 1994, and certainly added pressure on Minneapolis futures today.
• European Union soft wheat exports, according to the European Commission, have fallen 35% year over year. Since the season began on July 1, exports totaled 1.44 mmt as of July 21, versus 2.21 mmt at the same time last year. Leading importers of this wheat include Nigeria, Egypt, and Morocco.
• According to their agriculture ministry, the export duty on Russian wheat has been reduced by 13.5% to 1,540.4 rubles per mt as of July 24. This is down from 1,780.5 Rubles previously. For corn and barley, the duties remain at zero.
• Chinese officials said on Wednesday that their nation had the largest grain production increase this summer in nine years. A plentiful wheat harvest is cited as the driver of the increase. Reportedly, 23 million hectares of wheat were harvested, and yields were said to be up by 2.6% year over year.

DAIRY HIGHLIGHTS:

• Class III milk continued to push higher closing mostly green today, with the second month contract of August closing up 17 cents to close at $20.43.
• Spot cheese improved 1.25 cents to $1.95750/lb; blocks were up 1 cent to close at $1.94/lb and barrels up by 1.50 cents to close at $1.9750/lb.
• Whey improved 1 cent to $0.54/lb for its highest level since June 2022.
• Class IV futures were also up today with the second month contract August at $21.44, up 4 cents from Tuesday.
• Spot butter closed up 1.50 cents today to close at $3.09/lb and powder closed up 1.50 cents to close at $1.2350/lb.

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

Brandon Doherty