CORN HIGHLIGHTS:

• The corn market closed higher for the session as traders anticipated the release of Friday’s USDA WASDE and Quarterly Grain Stocks reports.
• This morning, the Biden Administration issued short-term guidance on the 45Z tax credit plan concerning the clean energy fuel tax credit. The release helped support the market during the session and was much anticipated by the sustainable aviation fuel industry. This was only interim guidance, leaving the final plan up to the Trump Administration.
• USDA will release weekly export sales for corn on Friday morning. The market will be watching those totals to gauge the demand pace. Concerns that corn demand may be slowing with higher prices and strong U.S. dollar limiting the U.S. in competitive balance with other global exporters. Expectations for new sales to range from 700,000 – 1.4 MMT for the week ending January 2. Last week’s sales were disappointing at 776,000 MT.
• The expectations for the January WASDE reports are for corn production to be limited, reducing the possible carry out total to 1.680 billion bushels. This may be achieved by a possible lower yield, following the trend from the December report. Grain stock may be a sleeper number on the day with expected stocks at 12.166 billion bushels, just slightly under last year.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the shortened trading day higher, supported by a significant gain in soybean oil, while soybean meal traded lower. March soybean meal fell below $300 as weather conditions in Argentina improved, while soybean oil rose in tandem with crude oil.
• In Brazil, the state of Mato Grosso has begun its soybean harvest after dry weather caused planting delays at the beginning of the season. Mato Grosso increased its planted soybean acreage by 1.47% from last year this season.
• Pre-report estimates for soybeans in Friday’s WASDE see ending stocks falling by 12 mb to 458 mb. Yield is expected to be reduced by 0.1 bpa to 51.6 bpa, but the bearish surprise in Friday’s report could come from changes made to Brazilian production. Many analysts are expecting soybean production to be above 175 mmt, but the USDA’s last estimate in December was 169 mmt.
• Brazilian soybean exports are expected to be down 30% at 1.71 mmt for the month of January compared to last year at this time. Despite this, a potential record harvest for the country would likely point to record export sales in 2025.

WHEAT HIGHLIGHTS:

• Despite corn and soybeans inching their way to positive closes, wheat was unable to follow suit, with all three classes posting losses. A mixed to lower close for Matif wheat provided no support, and with the U.S. dollar remaining elevated, wheat continues to hover near contract lows.
• With the monthly WASDE data set for release tomorrow, alongside the Winter Wheat Seedings report, the market may see news that could break prices out of their current sideways trend. However, traders are likely to focus more on the USDA’s stance regarding Russian production and exports.
• On a bullish note, U.S. SRW wheat is reported to be priced equally to Argentina’s wheat on a FOB basis and is offered at a $10 per mt discount compared to French wheat. This could support export sales, which are already strong.
• The CME is set to launch a new wheat contract for futures and options trading; if approved, the spring wheat contract will be available in the second quarter. Additionally, the CME will delist the current MIAX/MGEX spring wheat contract from its trading platform.
• India’s wheat production estimate for 2025/26 remains unchanged at 112.7 mmt, according to LSEG. This is despite a larger planted area in Haryana, a key wheat-producing state. While India is a major wheat grower, it consumes nearly all of its production. As a result, any decline in output could force the country to import wheat.

DAIRY HIGHLIGHTS:

• Class III futures were unchanged to higher today with the second month February chart at $20.92, up 6 cents from Wednesday.
• Spot cheese was 0.3750 cents higher on the day to close at $1.88375/lb. Spot whey was unchanged.
• The Class IV contracts were mixed but mostly higher today. February finished at $21.10.
• Spot butter was unchanged at $2.60/lb while powder gave back a half cent to move to $1.3650/lb.

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Author

John Heinberg