CORN HIGHLIGHTS:

• Selling in the wheat market pressured corn prices lower during the session. Charts have turned more negative technically as prices failed to push through the most recent high of 416 on September 6, as the momentum to the upside looks to have faded in the past couple sessions.
• The USDA reported weekly export sales this morning. USDA posted new net sales of 33.36 mb (847,400 mt) for 24/25. This total was in line with expectations and above last week’s 666,500 mt. China continues to be absent from the US corn export market. The last reported flash sale of corn to China was on April 14, 2023.
• Roughly 26% of US corn acres are in drought, which has increased as forecasts have remained warm and dry over the past couple of weeks. The dry weather may have reduced some of the top end of the crop that was late planted but has also allowed harvest to ramp up, triggering some hedging pressure in the market.
• Brazilian dry weather has brought some premium into US grain markets, but forecast models look to be turning wetter as the calendar moves into October. The return of rainfall will speed the planting pace for both soybeans and first crop corn. Estimates have the first crop of Brazilian corn at 19% planted, just below multi-year averages.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day slightly lower after trading on either side of unchanged throughout the day. Initially, strong export sales were supportive of soybeans, but corn and wheat faded into the day and brought soybeans down with them. The stock market was sharply higher today following yesterday’s Fed announcement to cut interest rates by 50 points which may have seen money flowing out of grains and into stocks.
• Soybean meal was mixed to end the day with the front months higher and deferred months lower, while soybean oil got a boost from strong export sales and followed crude oil and other veg oils higher. Last week, top exporter of soybean meal, Argentina, purchased over 88,000 mt of soybeans from the US for the first time since 2019, but in today’s export sales report, it was revealed that the sale was cancelled. US soybeans remain cheaper than those in Brazil which makes the cancellation interesting.
• Today’s export sales report saw an increase of a whopping 64.2 mb of soybean sales for 24/25 and 0.3 mb for 25/26. This was well above the average trade estimate and was also above the top end of trade estimates. Last week’s export shipments of 16.4 mb were below the 36.0 mb needed each week to meet the USDA’s estimates. Primary destinations were to Mexico, China, and Indonesia.
• In South America, conditions have been very dry, especially in Brazil, and key growing areas such as Mato Grosso are forecast to have at least 10 more days without rain. Chances of rain improve for early October, but if the rain does not materialize, it could be friendly to soybean prices.

WHEAT HIGHLIGHTS:

• Wheat led the grain complex lower today with double-digit losses for both Chicago and Kansas City futures. It appears that the situation between Russia and Ukraine has somewhat cooled off after a Russian missile hit a Ukrainian vessel last week. With the easing of tensions there, and a lack of fresh friendly news, the wheat market seems to have run out of steam.
• The USDA reported an increase of 9.0 mb of wheat export sales for 24/25 as well as an increase of 0.4 mb for 25/26. Shipments last week at 23.6 mb far exceeded the 15.8 mb pace needed per week to reach the USDA’s export goal of 825 mb. Additionally, sales commitments have reached 405 mb which are up 28% from last year.
• Drought continues to worsen in winter wheat areas. According to the USDA, as of September 17, about 58% of US wheat acres were experiencing drought. This is up 1% from last week, however some relief may be on the way. The US central and southern Plains are expected to continue to receive isolated showers over the next few days and into early next week. The Midwest is also anticipated to see scattered rains through Sunday.
• December Chicago daily wheat charts have the 21, 40, and 50-day moving averages all converged around the 560 area. This may be an important support level, but if violated, could mean that wheat has more downside ahead. Currently, technical indicators including the RSI and stochastics both show downward momentum.
• On a bullish note, the International Grains Council is reported to have decreased their world wheat production estimate by 1 mmt, now seen at 798 mmt. For reference, the USDA used a figure of 797 mmt in their September estimate.
• According to FranceAgriMer, their estimate of French soft wheat exports for 24/25 are now projected at 10.1 mmt. This is a drop from the July estimate of 14.1 mmt. Stockpiles were also cut to 2.74 mmt versus 3.04 mmt in July. Reportedly, the reason for the decline is due to fewer sales outside the EU bloc.

DAIRY HIGHLIGHTS:

• Class III futures bounced back today, more or less erasing yesterday’s losses with October finishing at $23.99.
• Spot cheese closed up less than a penny for a new high on the move at $2.4425/lb, while whey was down 0.75 cent to $0.5875/lb.
• After a tough Wednesday trade, Class IV action was quiet with contracts either unchanged or slightly lower.
• Spot butter remains a concern as it has now dipped under $3.00/lb, whereas powder remains in an uptrend.

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Author

Brandon Doherty