CORN HIGHLIGHTS:

• With little fresh news to push prices higher, the corn market began the week with sellers in control, led by weakness in the wheat market, and good harvest weather that helps keep harvest pressure in place.
• FranceAgriMer data indicated that the French corn harvest is only 6% complete as of October 7, due to wet conditions. This is the slowest pace in 11 years and compares to 50% completed last year.
• Crop analyst APK-Inform, lowered its corn export forecast for Ukraine by 11%, dropping it from 22.5 million metric tons to 20 mmt, largely due to lower production.
• With the US currently being the cheapest source of corn on the global market, production and export losses in regions like Ukraine and France could shift some demand to the US, potentially supporting US corn prices.
• Harvest will likely stay at a strong pace this week as midwestern weather forecasts remain mostly dry. Harvest was 30% complete last week, but that is expected to jump as producers are finishing soybean harvest and move over to corn. Hedging pressure will likely limit prices in the corn market. The USDA will release its updated crop progress report Tuesday afternoon with government offices closed for the Columbus Day holiday.

SOYBEAN HIGHLIGHTS:

• Soybeans continued with the momentum from Friday’s WASDE report and closed lower today with the November contract closing below 1000 for the first time in one month. Pressure has come from the ongoing US harvest and improved South American weather that is allowing planting to move at a better pace. Soybean meal closed higher today while soybean oil fell sharply.
• In Brazil, the 15-day forecast shows strong probabilities of rain totaling over 2 inches in the central regions, including Mato Grosso, the largest producing state and one of the driest until recent rainfall. Friday’s WASDE report kept Brazilian soybean production unchanged at 169 mmt.
• Since Brazil was previously too dry to begin planting, they are now behind at only 9.3% complete which compares to the pace of 17.4% at this time last year. If growing conditions remain favorable in South America following the US harvest, funds could be in a position to aggressively sell soybeans again now that they have pared down their net short position.
• Friday’s CFTC report showed that funds bought 13,088 contracts of soybeans, leaving them net short 21,798 contracts. Over the past three days, funds are estimated to have sold an additional 11,000 contracts and likely have sold more today.

WHEAT HIGHLIGHTS:

• Wheat closed the session with double-digit losses across all three US classes. Pressure came from a lower close for Matif wheat, weakness in corn and soybeans, a lack of fresh supportive news, and a rise in the US Dollar Index. Additionally, OPEC reportedly lowered its global crude oil usage estimate for 2024 and 2025. This marks the third reduction in as many months and may have added pressure to the grain complex.
• From a technical perspective, December Chicago wheat closed below the 21-day moving average (587 ¾) for the first time since the end of August. Breaking this support level may trigger further liquidation, with the next support around 572, right between the 40- and 50-day moving averages.
• Over the weekend, reports emerged of a new Russian missile attack on Ukraine. Two civilian vessels and a grain storage facility were damaged in the Odessa area, resulting in at least one death and several injuries. Despite this, the market showed little concern, as indicated by wheat’s lower close.
• SovEcon reported that Russia shipped 1.1 mmt of grain last week, with wheat making up 1 mmt of that total. Additionally, IKAR noted that Russia’s wheat export price closed at $230 per metric ton FOB, up $7 from the previous week. In related news, Russia’s agriculture ministry announced a new minimum price floor for wheat exports, set at $250 per metric ton.
• Industry analyst APK-Inform has reportedly decreased their estimate of Ukraine’s 24/25 grain exports from 39.1 to 37.2 mmt. However, this pertains mostly to expected declines in the corn harvest. They actually raised the 2024 wheat harvest production to 21.5 mmt, compared to 21.2 mmt previously. Furthermore, they increased their estimate of wheat exports from 13.8 to 14.4 mmt.

DAIRY HIGHLIGHTS:

• Class III futures were mixed today with the second month November contract down 24 cents at $20.79.
• Spot cheese fell 2.50 cents today to close at $1.8625/lb, not finding any relief in the new week. Whey was unchanged.
• The only movers on Class IV futures today were the two nearby months, which dropped 3 and 12 cents, respectively.
• Spot butter saw plenty of loads traded today, totaling 33, but fell a penny to $2.6150/lb. Powder gained a quarter cent.

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Author

John Heinberg