CORN HIGHLIGHTS:

• Corn futures followed soybeans higher as buyers supported the front month December futures, lifting the entire market higher. Despite today’s gains, the December contract failed to push through resistance at the 410 level.
• The December-March corn spread has narrowed over the past week, moving from -18 cents under March futures last week to -13 ½ cents today. Bull spreading at harvest suggests an increase in demand for fresh supplies, driven either by a lack of farmer selling, increased export demand, or transportation issues. Mississippi River levels at Memphis have become restrictive, causing the basis for both corn and soybeans to shift to a premium over the Board. The need to transport corn to Gulf export terminals is likely supporting the bull spreading seen in the market.
• Weekly corn export inspections were within expectations at 39 mb (1.00 mmt) for last week. Corn inspections are off to a strong start for the marketing year with total inspections up 31% over last year.
• The USDA announced three separate corn flash sales before the session this morning. Mexico purchased 196,926 mt (6.7 mb), South Korea purchased 130,000 mt (5.1 mb) and Unknown purchased 198,192 mt (7.8 mb), all sales were for the 24/25 marketing year.
• Corn harvest is expected to progress steadily as favorable weather conditions persist. The influx of new bushels into the pipeline will likely limit upside price potential in the corn market. Last week, the US corn harvest was 47% complete, and that figure is likely to increase again this week.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher to start the week with the November contract leading the. November options expire this Friday, which could be impacting futures prices along with the export sales reported this morning. Both soybean meal and oil ended the day higher as well.
• This morning, the USDA reported private export sales totaling 116,000 metric tons of soybeans for delivery to unknown destinations during the 24/25 marketing year. The USDA also reported a sale of 264,000 mt of soybeans received in the reporting period for delivery to unknown destinations during the 24/25 marketing year.
• Today’s export inspections report showed strong soybean numbers, totaling 89.4 million bushels for the week ending October 17. This brings total inspections for the 24/25 marketing year to 290 million bushels, down 3% from last year. The USDA projects total soybean exports at 1.850 billion bushels for 24/25, an increase of 9% from the previous year.
• Friday’s CFTC report indicated that as of Oct. 15th, managed funds were net sellers of 18,543 soybean contracts, which increased their net short position to 40,341 contracts. When soybeans made their recent low in August, funds held a net short position of around 175,000 contracts.

WHEAT HIGHLIGHTS:

• Early gains in wheat prices gave way to weakness, leading to a mixed close across the three futures classes. The US Dollar Index surged sharply today, hitting its highest level since early August and added pressure to the wheat market. Moreover, the index has traded above the 200-day moving average for three consecutive sessions, indicating potential for further gains.
• Weekly wheat export inspections of 9.9 mb bring total 24/25 wheat inspections to 340 mb, which is up 34% from last year and ahead of the USDA’s estimated pace. The USDA is projecting 24/25 exports to rise 17% from last year, reaching 825 mb.
• According to IKAR, Russian wheat export prices ended last week at $234 per metric ton FOB, a $4 increase from the previous week. However, this remains below the October floor price of $240 set by the Russian Grain Export Union. In related news, SovEcon reported that Russia exported 1.01 mmt of grain last week, with wheat accounting for 940,000 mt, down from 1.19 mmt the previous week.
• Southern Russia and eastern Ukraine continue to face drought conditions, though recent rains have provided some relief. However, as time progresses, the likelihood of frost and freezing conditions increases. Farmers are hoping for adequate winter precipitation to supply wheat with the necessary moisture as it emerges from dormancy.

DAIRY HIGHLIGHTS:

• After a strong turnaround in US cheese last week, the block/barrel average resumed its downward movement Monday, falling 1.75c to $1.95/lb.
• The drop in cheese brought sellers back into Class III milk futures. November fell 30c to $20.89 while December lost 27c to $21.08.
• The butter market found support, gaining 7c to $2.73/lb on 3 loads traded.
• Following the market close, the USDA released its September Milk Production report. The results were bearish, with production up 0.10% in September and a revision higher in August to up 0.40%.
• After the release of the milk production report, nearby Class III contracts saw additional selling and were down as much as 62c.

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Author

John Heinberg