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

CORN HIGHLIGHTS:

• Support near the 200-day moving average in July corn held in overnight trade as crop conditions came in 2% lower than last week at 72% in the good to excellent categories. While the drop came within expectations, the current ratings are the highest in 4 years. The USDA also reported that 93% of the crop has emerged versus 95% last year and the 5-year average of 92%.
• According to China’s General Administration of Customs, Chinese imports of corn in the month of May were 1.05 mmt, nearly 37% lower than the same time last year. Though the month of May saw a dramatic decline, overall year to date corn imports came in at 10.13 mmt, a 0.5% year over year drop.
• AgRural reported that Brazil’s second (safrinha) corn crop is 21% harvested, an 11% increase from last week and compares to the 5% harvested at this time last year. This marks the fastest pace since the agency began reporting its weekly data in 2013.
• Now that the growing season is underway, weather has become a primary focus for the market. The current forecast shows rain for Ohio, Illinois, and Indiana next week, though coverage is expected to be limited. In the northwestern Corn Belt, heavier rains could result in localized flooding.

SOYBEAN HIGHLIGHTS:

• Soybeans closed higher for a turnaround Tuesday with the two front months posting significant gains while the deferred contracts only closed slightly higher. Support likely came from yesterday’s Crop Progress report in which soybean crop ratings were lowered, but yesterday’s large NOPA crush number was supportive as well. Both soybean meal and oil closed higher as well with bean oil leading the way up.
• Yesterday, the USDA released its Crop Progress report which showed the good to excellent rating for soybeans falling by 2 points to 70%. This was within the range of trade estimates and is still significantly higher than last year’s rating of 54%. 93% of the soy crop is planted, which compares to the 5-year average of 91%. 82% of the crop has emerged which compares to the 5-year average of 79%.
• The bull spreading in soybeans today was likely a result of yesterday’s higher than expected NOPA crush numbers which indicate nearby demand for cash soybeans. The USDA has estimated the processing value of soybeans at $14.42 a bushel in Illinois as of June 14 which is well above the average US cash price.
• Yesterday’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. Poor export demand has pressured markets recently.

WHEAT HIGHLIGHTS:

• Wheat had another down day across the board, alongside Matif futures that also closed lower. This is the third consecutive lower close for July Chicago wheat, and the fifth for July Kansas City and Minneapolis wheat. With improvements to crop ratings yesterday, a fast harvest pace for winter wheat, and better than expected yields on the HRW crop so far, it will be difficult for wheat to rally without some fresh bullish news.
• The Crop Progress report yesterday afternoon indicated that winter wheat condition improved by 2% to 49% good to excellent, and 27% of the crop is harvested. This is about double both the 13% pace from a year ago and the 14% five-year average. Spring wheat conditions also improved by 4% to 76% good to excellent, with 95% of the crop emerged versus 96% last year and the 5-year 93% average.
• Adding bearish pressure are reports from IKAR that Russian wheat FOB export values are down about $18 from the season high, to $234 per mt. This is despite the recent declining estimates of Russian wheat production and does not bode well for US exports or futures prices.
• Heavy rains are expected to hit southern Brazil again over the next week, raising concerns about flooding after the recent deluge in May. This weather could also delay wheat plantings in the region.
• According to customs data, China’s wheat imports in May totaled 1.86 mmt, a 61% increase year on year. Year-to-date wheat imports have reached 8.09 mmt, up 12.6% from last year. Additionally, drought in China’s northern growing region may curb yields, potentially leading to more foreign grain imports.
• Argus has reportedly reduced their estimate of Romanian wheat production from 10.6 mmt to 10.45 mmt after a crop tour. This reduction is due to a lower estimated planted area, while yields remain unchanged. However, with warmer temperatures expected in the near term, yields may be affected, potentially leading to further production cuts.

DAIRY HIGHLIGHTS:

• The second month July Class III contract fell 56 cents today to close at $19.61, trading limit down at one point.
• While whey was unchanged at $0.48/lb, spot cheese fell 5.75 cents to $1.90/lb for a total of 9.50 cents on the week so far.
• Class IV prices were unchanged to lower with the July contract down 11 cents on 5 trades. This is the lowest it has traded since overtaking on the second month chart.
• Spot butter was unchanged at $3.1075/lb, somewhat surprising given the jump in GDT prices. Powder fell a quarter cent.

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Author

Amanda Brill