CORN HIGHLIGHTS:

• Buying strength, fueled by short covering, helped push the corn market to double-digit gains to start the week. The close today marks the highest close in December corn on the daily chart going back to July 25, a couple of months ago.
• Corn futures are challenging resistance on the December chart. Today’s close is testing a multi-month long-term trendline for the December futures contract. Corn prices could see additional short covering and strength if this resistance level were to break.
• Weekly export inspection for corn improved over last week. US exporters shipped 43.4 mb (1.103 mmt) of corn last week, up sharply from the week before. For the marketing year, total shipments are running 6% ahead of last year.
• Corn harvest was 9% complete in last week’s Crop Progress report. Expectations are for a steady increase in harvest activity given the friendly weather for most of the week. A strong harvest pace could limit price rallies with hedging pressure on the corn market.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day sharply higher, breaking out of their recent trading range by a wide margin. November futures closed above the top of their Bollinger band but were unable to fill the gap left on the chart at 1045. Dry weather in Brazil, potentially lower US soybean yields, and fund buying of short positions provided support today. Both soybean meal and oil also finished higher.
• Harvest has begun, and the Crop Progress report later today is expected to show the crop between 13% and 15% harvested. Some producers have reported over the weekend that yields may not be as large as expected following the 30-day period of hot and dry weather in August, so the USDA may need to adjust its soybean yield estimate lower.
• In Brazil, conditions remain extremely dry, and just 0.5% of the crop has been planted which compares to the average pace of 1.5%. The country is expected to receive rain in the beginning of October.
• This morning, the USDA reported private export sales totaling 165,000 metric tons of soybeans for delivery to unknown destinations during the 24/25 marketing year.
• Today’s export inspections report showed soybean inspections at 17.8 mb for the week ending September 19 with total inspections for 24/25 at 45 mb, down 6% from this time last year. Inspections were within the range of trade estimates.
• Friday’s CFTC report showed managed funds bought 8,186 soybean contracts as of Tuesday, September 17, reducing their net short position to 122,415 contracts – a decrease of just over 63,000 contracts since mid-July.

WHEAT HIGHLIGHTS:

• Wheat closed with solid gains across the board. Fund short covering of grain contracts likely fueled today’s surge. Paris milling wheat futures were also up strongly, supporting US wheat prices. As the US heads into election season and with two wars ongoing worldwide, uncertainty looms over the marketplace. Additionally, news that Japan fired warning flares at Russian jets, which violated their airspace, has heightened global geopolitical tensions.
• Weekly wheat export inspections at 26.1 mb bring total 24/25 inspections to 282 mb, which is up 36% from a year ago and running ahead of the USDA’s estimated pace. Total 24/25 exports are estimated at 825 mb, a 17% increase from the year prior.
• Data from the CFTC indicated that as of Tuesday, September 17, funds were buyers of about 10,000 wheat contracts across all three classes of wheat. This brought their total net short position to 59,000 contracts, which is the smallest in about three months.
• According to their agriculture ministry, Ukraine’s grain harvest has reached 31.9 mmt as of Friday, compared to 29.8 mmt at this time last year. Of that total, wheat made up the majority with 22.3 mmt collected, up slightly from last year’s 22.2 mmt.
• Global issues in key wheat-growing regions have added to the bullishness. In Argentina, reports suggest that some farmers are abandoning wheat fields due to severe drought. Meanwhile, in the northern hemisphere, Coceral has lowered its estimate for EU and UK wheat production by 8.5 mmt, bringing the total to 126 mmt.

DAIRY HIGHLIGHTS:

• Class III futures were mixed on Monday but most held small gains. There appeared to be some rolling action from October to November futures.
• The spot trade for Class III products saw spot cheese down 1.8750 cents while whey was unchanged.
• The Q4 Class IV contracts closed lower today, ranging from 2 to 10 cents of losses. October had 29 contracts trade.
• Following last week’s beating, spot butter lost another 3.25 cents to today close at $2.94/lb. Powder was unchanged at $1.38/lb.

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Author

Amanda Brill