CORN HIGHLIGHTS:

• The corn market saw choppy 2-sided trade as the market squared positions before tomorrow’s USDA WASDE report. Grain markets in general saw mild buying strength during the session.
• Thursday the USDA will release the next WASDE and Crop Production reports. Expectations are for US corn yield to be lowered by 0.4 of a bushel to 182.7 bu. per acre reflecting the variability in this year’s corn crop. Regardless, this is still a record for US corn yield. Ending stocks for the 24/25 marketing year are expected to be 2.033 billion bushels, still a large overall supply picture.
• Weekly ethanol production improved to 1.080 million barrels per day last week, up 4% over last year. The strong usage of corn in ethanol production should merit a raise of old crop corn usage for ethanol in Thursday’s USDA report. The USDA is targeting 24/25 marketing year ethanol usage to be at 5.450 billion bushels.
• The USDA will also release weekly export sales on Thursday morning. Expectations are for corn sales to range from 700,000 – 1.6 mmt for the week. New crop sales last week reached 1.822 bb.
• The Mississippi River levels at Memphis have dropped to record low levels, limiting barge traffic on the river. The increased freight cost will weigh on corn exports as US corn prices are rising versus global grain competition. In addition, near-term gulf movement could be limited by the impacts of Hurricane Francine making landfall in the Louisiana area today.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher but have been in a steady downward trend since last Friday when prices broke to the downside. With the results of tomorrow’s WASDE report uncertain, funds are likely buying back a portion of their short position. Soybean meal ended the day higher, while soybean oil was lower despite higher crude and palm oil.
• Estimates for tomorrow’s WASDE report see the 23/24 soybean ending stocks falling to 343 mb from 345 mb last month, and 24/25 ending stocks increasing to 568 mb from 560 mb due to an expected increase in yields. The average yield estimate for the report is 53.3 bpa with the high end of the estimates at 54.9 bpa. Last month’s estimate was at 53.2 bpa. World ending stocks are expected to be virtually unchanged to slightly lower at 134 mmt.
• In Brazil, on top of issues already being caused by the ongoing drought, fires have now burned the protective straw that is used by soybean farmers to protect fields from heat. The window for early planting is ending, and now it seems like the typical planting pace may be pushed back which could be supportive to prices.
• After crude oil futures lost nearly 3 dollars a barrel yesterday, they recovered slightly today and are currently trading $1.50 higher. Yesterday’s losses came from OPEC stating that it was lowering its demand forecast for the second time in two months. Unfortunately, today’s rebound did not translate to support for soybean oil.

WHEAT HIGHLIGHTS:

• Wheat posted gains across all three classes, alongside Matif wheat futures. This marks the third consecutive higher close for the December Chicago contract, likely driven by upward technical momentum and short covering ahead of tomorrow’s WASDE report, as there is little fresh news directly impacting wheat today.
• The average pre-report estimate for US 24/25 wheat ending stocks in tomorrow’s WASDE report is 820 mb, down 8 mb from the August forecast. World ending stocks for 23/24 are expected to show a small increase from 262.4 mmt to 262.5 mmt, while the 24/25 world carryout is anticipated to drop to 255.8 mmt from 256.6 mmt in last month’s report.
• The USDA is not expected to revise its estimate of US 2024 wheat production, which currently stands at 1.982 bb. An updated estimate will be released on September 30 in the Small Grains Summary report. If there are any significant changes in tomorrow’s wheat numbers, they may come in the form of an upward revision to exports; current sales are up 31% from last year.
• According to the Ukrainian agricultural ministry, the nation’s grain exports as of September 11 have totaled 8.2 mmt, well above the 5.4 mmt for the same period last year. Wheat exports account for 4.3 mmt of this total, compared to 2.5 mmt last year.
• A month ago, the USDA approved HB4 wheat, a GMO variety more resistant to drought. The CEO of Bioceres, the Argentinian biotech company that developed this variety, recently stated it will take two years before marketing can begin in the US. The HB4 variety has already been approved in Argentina and Brazil, but securing approval from countries that import US wheat will be critical.

DAIRY HIGHLIGHTS:

• Class III futures fell ending the day red, with the second month contract October dropping 2 cents to close at $23.90.
• Spot cheese surpassed yesterday’s close to set a new high for the move, gaining 2.75 cents to close at $2.3500/lb. Spot whey remained unchanged at $0.59/lb.
• Class IV milk fell with the second month contract October falling 10 cents to close at $22.85 and November falling 17 cents to close at $22.77.
• Spot butter remained unchanged and closed at $3.1750/lb. Spot powder was able to gain 0.25 cents to close at $1.3975/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