CORN HIGHLIGHTS:

• Strength in the wheat and soybean market helped pull corn futures higher from early morning lows as prices consolidated at the top of this most recent push higher.
• Weekly ethanol production dropped to 994,000 barrels per day last week, which was below market expectations and 1.5% below this time last year. Production has slipped in September as plants slow production and go through maintenance to prepare for freshly harvested supplies. Last week 100 mb of corn was used for production, which was below the pace needed to meet USDA targets.
• The USDA announced a flash sale of corn to Mexico. Mexico purchased 7.1 mb (185,000 mt) of corn for the current marketing year.
• The Buenos Aires Grain Exchange released projections for Argentina’s 24/25 marketing year corn crop. The exchange forecasts production at 47 mmt, down approximately 5% from last year, as producers shift production to soybeans to combat disease issues.
• South American weather will remain the focus of the corn and soybean markets in the near future. Hot and dry conditions helped support grain prices in the recent rally. Forecasts are staying on the drier side, but seasonal rains are looking to pick up going into October.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher for the third consecutive day as funds continue to exit their short positions in a big way. Since Monday, November futures have gained 41 ½ cents, and the funds are estimated to have bought back over 35,000 contracts. Both soybean meal and oil were higher today, but soybean oil has been the leader recently.
• The Buenos Aires Grain Exchange posted their estimates for the 24/25 marketing year soybean crop. The exchange anticipates total production to be 52 mmt for the next crop year. This total is higher than last year as the Exchange expects to see some shift from corn to soybeans due to disease concerns in the corn crop that limited production last year.
• The USDA will release weekly exports sales totals on Thursday morning. Total new soybean sales are expected to range from 900,000 – 2.0 mmt. Last week, sales were 1.75 mmt. Soybean sales have ramped up in recent weeks with improved Chinese demand and concerns regarding early Brazil weather.
• On Monday, September 30, the USDA will release its Quarterly Grain Stocks report which can sometimes contain surprises. Soybean stocks are expected to come in at 347 million bushels which would be up 31% from the 264 mb in September 2023.

WHEAT HIGHLIGHTS:

• Wheat gained strength throughout the session and closed with double-digit gains in both the Chicago and Kansas City contracts. This is despite a move higher for the US Dollar Index. US wheat appears to continue to follow Matif wheat futures, which also closed higher today. Spillover support from soybeans also contributed to the higher close for US wheat futures.
• The Buenos Aires Grain Exchange is reportedly projecting Argentina’s 2024/25 wheat production at 18.6 mmt. For reference, the USDA is using a figure of 18 mmt. Recent rains have favored the eastern areas, which already have good soil moisture, but the western and northern regions are still dry and that may be affecting the development of winter wheat.
• On a bullish note, according to SovEcon, just 8.3 million hectares of Russian winter crops have been planted. This is down about 1 million hectares from last year and is attributed to dry conditions in southern areas. In fact, the planting pace is said to be the slowest in 11 years.
• Reportedly, China has set a maximum purchase of domestic wheat at 37 mmt for 2025 and 2026. The price is set at 119 yuan per 50 kg, which is equivalent to 2,380 yuan per mt. For reference, the minimum price was set at 118 yuan per 50 kg in 2024. China sets a minimum purchase price to support farmers when the market price drops below unprofitable levels.

DAIRY HIGHLIGHTS:

• Gains were made in the Class III market today with both October and November contracts gaining 17 cents each. October closed at $23.45 while November finished at $22.83.
• Spot cheese was down for the fourth day in a row losing 6.625 cents to close down at $2.30125/lb.  Spot whey, on the other hand, gained 0.50 cents to close at $0.5950/lb.
• Class IV milk had another tough day with October closing down 25 cents to $21.73 and November closing down 26 cents to $21.94.
• Spot butter lost 4 cents to close at $2.86/lb. Spot powder remained unchanged closing at $1.3775/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

John Heinberg