CORN HIGHLIGHTS:

• The corn market finished lower on the session for the second straight day. Hedge pressure and October grain options expiration likely pressured the market lower to end the week. December corn closed the week 11 ½ cents lower.
• Corn harvest continues to ramp up across the Midwest as favorable weather supports progress. Early results show strong yields in most regions, which could offset losses in other areas caused by spring weather. As fresh supplies enter the pipeline, upside potential may be limited as harvest advances.
• Low Mississippi River levels in the Memphis area is a concern for the transportation of bushels to export markets. Restrictive flow has increased freight costs, which impacts the price of corn to the export market, and the backlog of corn will likely pressure basis levels in the cash market.
• Managed Funds have eliminated over 200,000 net short contracts since reaching their maximum short positions in early July. This has happened despite a muted rally in the corn market. On Friday’s Commitment of Traders report, expectations are for funds to be under 100,000 net short contracts, pushing their lowest net short for the year with harvest starting to build.

SOYBEAN HIGHLIGHTS:

• Soybean markets finished slightly lower with choppy trade during the session. The loss of upward momentum and October options expiration likely pressured soybeans as harvest continues to push forward.
• Despite being a serial option, October grain options expired today, and prices typically gravitate toward areas with significant open interest on expiration day. At the start of the session, there was a combined open interest of nearly 16,000 put options at the 1000 and 1010 levels. With the market closing at 1012, those puts expired worthless at the close.
• The USDA announced a flash sale of soybeans this morning. China purchased 121,000mt (4.4 mb) of US soybeans for the 24/25 marketing year. Soybean demand has improved in recent weeks, but total sales for the 24/25 marketing year are still at their lowest totals since the 18/19 marketing year.
• In South America, conditions have been very dry especially in Brazil, which has slowed soybean planting in the early part of the season. Weather models are seeing improved rainfall chances late next week into October, in line with the start of the Brazil rainy season. If forecasts materialize, the improved moisture chances in Brazil will limit the soybean futures market.

WHEAT HIGHLIGHTS:

• With little fresh news for buyers to sink their teeth into, the wheat complex gave up its earlier gains from reports of lower production in Europe and Australia and ended the day mixed, on the prospect of rain over the weekend.
• The Belgian trade association, Coceral, lowered its EU grain production forecast to 280.3 million metric tons, down from its June estimate of 296 mmt. Of this total, 126 mmt is soft wheat, reduced from 134.5 mmt in June.
• Argentina’s prolonged drought is causing some farmers to abandon wheat fields in the northern and western regions. In contrast, around 80% of the wheat crop in the eastern areas is reportedly in normal to excellent condition.
• In Western Australia, the Grain Industry Association reduced the region’s wheat production estimate by 7% from last month, lowering it to 9.3 mmt due to dry weather. Nationally, Australia is projected to produce 31.8 mmt, according to ABARES.
• In the US, a system is expected to bring some widespread rain with some heavier precipitation across the central and southern Plains over the weekend, which should improve conditions and help newly planted wheat get established.

DAIRY HIGHLIGHTS:

• Class III futures traded back and forth for much of Friday’s session before Q4 contracts ultimately closed lower. December futures gave back most of Thursday’s gains closing at $21.73.
• Spot cheese ran into some resistance losing 2.875 cents to close at $2.41375/lb. Whey was unchanged at $0.5875/lb.
• Class IV futures contracts were quiet again on Friday with only 6 contracts traded on the day.
• Spot butter improved slightly to $2.9725/lb during today’s spot session but closed out the week 15.75 cents lower. Powder also gained 0.25 cents on the day to go home at $1.38/lb.

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Author

John Heinberg