The CME and Total Farm Marketing Offices Will Be Closed Wednesday, June 19, in Observance of Juneteenth

CORN HIGHLIGHTS:

• The corn market experienced volatile two sided trade and heavy resistance up towards 450 and the 200-day moving average in the July contract. Heavy selling in both soybeans and wheat contributed to the weakness in the corn market along with Conab’s report that Brazil’s safrinha corn crop harvest is 21% complete, well ahead of last year’s 5% at this time. The quick Brazilian harvest could reduce the US corn export share.
• Weekly export inspections for corn came in as expected with 51 mb inspected for export. Total year-to-date inspections are running 26% ahead of last year at 1.591 billion bushels versus the USDA’s projection of a 29% increase.
• Friday’s CFTC data showed, as of June 11, that managed funds bought a mere 427 contracts, keeping their net short corn position relatively unchanged at 212,279 contracts. Of note though were net sales of 1,822 contracts by Index funds which typically hold long only positions, showing a potential shift in bullish sentiment.
• The Crop Progress report released later this afternoon is expected to show a 2%-3% decline in the good-to-excellent rating for the corn crop. Although initial ratings were historically high, significant trouble spots remain across the Midwest, with some areas experiencing excessive heat and dryness, while others have received too much rain.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day significantly lower to start the week with the July contract down 22 cents and November down 19 ½ cents. Pressure is coming from good weather forecasts in the Corn Belt over the next month and good planting progress so far. Soybean meal dragged the complex lower with the July contract down 2.20%. Soybean oil was mixed with the three front months slightly higher and deferred months lower.
• Today’s move lower came despite the NOPA crush report that was released and showed US May crush at 183.625 million bushels which was well above trade estimates and was a record for the month of May. With export demand sluggish, crush demand in the US is crucial.
• Today’s weekly export inspections report showed soybean inspections at 12.3 mb for the week ending June 13. This puts total inspections at 1.502 billion bushels which is down 17% from the previous year. The USDA is estimating soybean exports at 1.700 billion bushels for 23/24 which would be down 15% from the previous year.
• Friday’s CFTC report showed funds as net sellers as of June 11 adding 16,139 contracts to their net short position and bringing it to 75,880 contracts. The funds have likely been more aggressive sellers since prices turned lower on Friday.

WHEAT HIGHLIGHTS:

• It was an ugly session in the grain complex with all three US wheats posting double digit losses alongside lower corn and soybeans. With no major news to drive this selloff, it may be technical in nature and driven by the managed funds. Additionally, the gap lower, and sharply lower close for Matif wheat futures did not offer any support to the US market. Winter wheat harvest pressure is also limiting any upside price movement.
• Weekly wheat inspections at 13.8 mb bring the total 24/25 inspections to 25 mb. Inspections are ahead of the USDA’s estimated pace, and they are projecting exports at 775 mb, which is up 8% from the year prior.
• Friday’s CFTC data showed that as of June 11, funds sold approximately 13,000 contracts of Chicago wheat, bringing their net short position to about 45,000 contracts. Minneapolis and Kansas City also saw them add short contracts – about 5,000 and 3,000 respectively.
• According to their Agriculture Ministry, Ukraine’s grain exports have totaled 48.7 mmt since the season began on July 1, 2023. This is about a 3% increase from the year before, and of that total, 17.9 mmt are wheat, up about 11% year over year. Furthermore, Ukraine’s total grain exports are expected to hit 60 mmt in the next season that begins on July 1, 2024. Their grain production is pegged at 56 mmt, with wheat expected to account for 21 mmt of that total.
• From a bullish perspective, India’s monsoon rain coverage is reported to be 20% below normal, pushing domestic prices to around $8.50 per bushel, a seven-month high. With government reserves also low, India may still need to be a net wheat importer.

DAIRY HIGHLIGHTS:

• Class III milk sellers are getting aggressive again, as the US spot cheese block/barrel average has once again failed to hold over the $2.00/lb level.
• This has historically been a level that has been tough for cheese to break through. If cheese can’t hold $2.00/lb, premium needs to be taken out of Class III futures – which is what happened today and last Friday.
• July Class III milk fell 50c lower to $20.17 and is now down $1.00 from its $21.17 peak from last week Thursday.
• The butter market continues to move slow and steady, adding another 1.75c to $3.1075/lb on Monday.
• All 2024 Class IV milk contracts still hold over the $21.00 level. Price action was quiet on Monday as July was flat at $21.35 while August added 4c to $21.42.

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Author

Brandon Doherty