CORN HIGHLIGHTS:

• Selling pressure remained in the grain markets as corn futures saw losses on the day’s session. December corn pushed to a new low for the move as it took out yesterday’s low on overall good crop ratings and active precipitation on the weather radar that kept the sellers motivated.
• The USDA released the latest crop ratings on Monday afternoon. The current corn crop was rated 69% good/excellent, down 3% from last week, but meeting analyst expectations. A rating of this level still reflects a trendline or higher potential yield at this point. Eastern corn belt states saw ratings slip as those crops dealt with a second week of hot and drier conditions.
• The corn market saw rain on the radar during the session as a system ranged from Eastern Iowa through Ohio during most of the day. While coverage and precipitation totals are still undetermined, areas that needed rainfall seem to be receiving beneficial rains.
• The USDA announced a flash sale of corn to Mexico this morning. Mexico purchased 209,931 mt (8.3 mb) of corn split between the current and next marketing year. Of that total 22,000 mt is for the 23/24 marketing year and 188,000 mt is for the 24/25 marketing year.
• Managed funds are still holding a large short position in the corn market. As of June 18, funds were net short 191,000 corn contracts, which was reduced by 20,000 contracts week over week. The recent selling pressure indicated that the funds have likely grown this short position as prices are pressured by favorable weather forecasts.

SOYBEAN HIGHLIGHTS:

• Soybeans closed lower today with the November contract closing at the lowest level since August of 2021. Yesterday, futures swung wildly lower before recovering for a higher close but today, they were unable to recover despite crop progress showing crop ratings falling. Both soybean meal and oil closed significantly lower as well as trade expects a large soybean crop.
• Yesterday’s Crop Progress showed the soybean good/excellent rating falling by 3 points to 67% which was 1 point below the average trade estimate and compares to 51% from a year ago. 90% of the soybean crop has emerged which compares to 87% last year, and 8% of the crop is blooming.
• On Friday, the USDA will release its Quarterly Stocks and Planted Acres reports. Analysts are estimating that the number of soybean planted acres will come in at 86.753 million which would be slightly higher than last month’s guess of 86.510 million. Quarterly soybean stocks as of June 1 are estimated to come in at 0.962 billion bushels which would be higher than last month.
• Monday’s CFTC report showed funds selling additional contracts as of June 18. They added 30,090 contracts to their net short position bringing it to 105,970 contracts and have likely added more shorts since that day.

WHEAT HIGHLIGHTS:

• Wheat closed lower across the board yet again, with the same old story. A combination of harvest pressure, lower Paris futures, a higher US Dollar, and falling Russian values are all to blame. Looking at the silver lining, however, soft wheat yields in Europe have fallen to the five-year average due to declines in Romania, Italy, and the Netherlands. Further declines there may provide some support to the oversold US market.
• According to the USDA, winter wheat condition improved 3% to 52% good/excellent, reflecting the better than anticipated yields in the Southern Plains. In addition, 40% of winter wheat is said to be harvested which is well above both the 5-year average pace of 25% and last year’s 21%. Spring wheat conditions did slip 5% to 71% good to excellent due to flooding in the northwest. Also, 18% of the crop is headed which is in line with 5-year average but below 25% from the year prior.
• Early wheat harvest results in Russia are reported to show better than expected yields. This is despite the hot and dry pattern, and analysts are now predicting a crop of 80-82 mmt. While this is still well below the early season estimates up to 94 mmt, it is an improvement from more recent sub-80 mmt projections.
• Indian wheat stocks are the lowest in 16 years at 7.5 mmt. There is also talk that India may remove their 44% import tax on wheat – this would allow for an estimated 2-4 mmt of imports. Though much of that is expected to be sourced from Russia, it may still provide some bullish support to the market.
• On a bearish note, La Nina may be weaker than originally thought. Therefore, according to the Rosario Grain Exchange, there is better hope for Argentina’s 24/25 crop season. They are currently planting the 24/25 wheat crop. Normally, La Nina means a drier pattern for Argentina, which caused crop losses form them last year.

DAIRY HIGHLIGHTS:

• Class III milk futures saw red across the board today with the August contract closing limit down to last trade at $20.09/cwt.
• Spot cheese fell 1.1250 cents to 1.89125 while whey gained 1.50 cents to $0.4850/lb. Sellers continue to stay ahead of the market pressuring prices lower.
• Class IV futures were weaker on the day due to a weaker spot trade for products and overall selling pressure in the dairy space. September futures saw the biggest loss at 44 cents to last trade at $21.16/cwt.
• Spot butter continues its descent lower, losing 3.50 cents to trade at $3.0325/lb. Spot powder dropped half a cent to close at $1.1875/lb.

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Author

John Heinberg