CORN HIGHLIGHTS:

• Despite a difficult start to the day, corn futures found enough buying strength to finish mostly higher on Monday. The December corn market remains in the overall sideways pattern that it has been in since early July, holding the bottom of the range at 405 today, with 420 at the top end.
• Money flow may have been the reason for the afternoon strength as funds saw support levels hold and exited short positions before the end of the month, and Tuesday afternoon’s position reporting for the Commitment of Traders report.
• Managed money funds decreased their net short position in corn on last week’s Commitment of Traders report. As of Tuesday, July 23, hedge funds exited 24,847 net short contracts to hold a net short position of 318,549 contracts, reflecting the overall bearish tone of the market.
• The soybean and corn markets saw selling pressure to start the session as weather forecasts became more crop friendly. The forecasted heat for the Midwest was shifted more to the west, and rainfall potential was increased in the forecast for the corn belt for early August.
• The USDA released weekly corn export inspections on Monday morning. Corn inspected for export as of July 25 totaled 41.7 mb and was above market expectations. Year-to-date, corn inspections total 1.837 billion bushels. This total is up 34% from last year and in line with the USDA forecast.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower but came back significantly from their lows earlier in the day, which saw the September contract down over 40 cents at one point before recovering. September beans also made new contract lows and posted a new contract low close. Soybean meal was bull spread with the two front months higher but deferred contracts lower while soybean oil was bear spread with front months lower but deferred months higher.
• Today’s price action was very volatile, and the early pressure was likely due to weather forecasts which showed temperatures slightly lower than earlier predictions. The price action in the later part of the day could have been due to managed funds taking profits on their near record large short position ahead of month end.
• While the slide in soybean prices has been discouraging, a silver lining is that US Gulf new crop offers have become cheaper than Brazilian FOB offers by a significant amount which could cause exports to start ramping up. China has been a buyer of new crop US soybeans last week and hopefully will continue these purchases.
• Friday’s CFTC report showed funds as buyers of soybeans as of July 23. They bought back 22,091 contracts which reduced their net short position to 163,659 contracts. On Friday, funds were estimated to have sold 18,500 contracts of soybeans.

WHEAT HIGHLIGHTS:

• Wheat closed with gains today across all three classes, despite last week’s spring wheat tour in North Dakota finding record yields, a lower close for Matif wheat futures, and a higher US Dollar Index. Today’s rally may be attributed to a technical recovery, as both SRW and HRW contracts had made new lows and were becoming oversold again.
• Weekly wheat export inspections at 16 mb bring total inspections to 112 mb which is up 11% from last year. This week’s inspections were on the higher side of what was expected but in line with what is needed to reach the USDA’s export goal of 825 mb.
• According to IKAR, Russia’s wheat export price ended last week at $220 per mt, which was up $1 from the week prior. Additionally, SovEcon said that last week Russian grain exports hit 1 mmt, versus 710,000 mt the previous week. Of that total, wheat accounted for 760,000 mt.
• Kazakhstan, according to Interfax, has extended their ban on wheat imports through the remainder of 2024, reportedly in an effort to stabilize the market after illegal imports caused domestic prices to decline sharply.
• Friday’s CFTC data indicated that managed funds, as of July 23, decreased their net short position in both Chicago and Kansas City wheat futures. The former saw a drop of just 0.9% to 75,184 contracts, while the latter was reduced by 6.9% to 40,866 contracts.

DAIRY HIGHLIGHTS:

• Class III milk futures jumped double digits in most nearby contracts once again on Monday. August added 14c to $20.50 while September added 13c to $21.53.
• Each Class III contract of September, October, November, and December hit new contract highs today.
• Recent reports have been pretty friendly to the market, with milk production down 1% year-over-year in June, cow numbers revised lower, and cheese in cold storage in a steady decline.
• Spot whey closed Monday at $0.57/lb, which is its best price since May 2022.
• There are no major reports this week and there is not a GDT auction event either. Expect spot market trade to dictate price action.

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Author

Brandon Doherty