The CME and Total Farm Marketing Offices Will Be Closed
Thursday, July 4, in Observance of Independence Day

CORN HIGHLIGHTS:

• Corn futures softened from early session gains to finish mixed on the session, as the prospects of large supplies, lack of consistent demand, and weakness in the wheat market weighed on corn futures.
• Overall demand has become more stagnant for corn, but old crop USDA targets will still likely be reached. New crop export demand has been disappointing compared to the last handful of years. Demand will be a key for the market to find stability. The USDA announced a flash sale of corn, with Columbia purchasing 100,000 mt (3.9 MB) of old crop corn.
• On Monday afternoon’s Crop Progress report, the USDA reported that corn conditions fell to 67% good to excellent, down 2% from last week, and slightly below market expectations. This rating is well above last year’s 51% G/E rating.
• The Brazilian Real is trading at its lowest level versus the US Dollar since January 2022.  The weakening Brazilian currency improves the competitiveness of Brazilian corn and soybeans versus the US on the global export market.
• Weather forecasts will remain a major focus for the markets going into the key July weather time frame. While the forecast remains on the warm side, precipitation remains active into the middle of the month. Currently, weather is non-threatening overall to crop production.

SOYBEAN HIGHLIGHTS:

• Soybeans closed higher but faded significantly from their highs earlier this morning, which saw prices in the August contract up as much as 16 cents. Bull spreading between August and November soybeans continued today with the spread widening. Soybean meal was bull spread as well with the front month higher but deferred lower, and soybean oil was higher.
• Yesterday afternoon, the USDA released its Crop Progress report which showed no changes to the good to excellent ratings that remained at 67%. Trade was expecting a slight 1-point decline. 20% of the crop is blooming, which is on par with a year ago and compares to 8% last week. 3% of the crop is setting pods which is also on par with last year’s pace.
• Domestic crush demand has been very firm and has been a supportive factor with export demand so slow. 192 mb of soybeans were crushed in May which is higher than a year ago. Profitable crush margins are supporting this demand and are also contributing to the bull spreading as producers buy cash soybeans.
• Soybean oil was higher for the fifth consecutive day and was a large source of support for soybeans throughout the day. Today, the USDA said that renewable biodiesel capacity was up 4.1 billion pounds in April compared to a year ago at that time. In addition, India may be placing higher tariffs on Chinese goods which could cause trade conflicts that could move China to buy soybean oil from the US instead.

WHEAT HIGHLIGHTS:

• Despite higher closes for corn and soybeans, wheat failed to follow suit. The pressure from winter wheat harvest, a lower close for Paris milling wheat futures, and potential profit-taking after yesterday’s rally may be contributing factors. However, Chicago and Kansas City September contracts managed to hold the 10-day moving average as support today after rallying above it yesterday.
• Additional pressure may have come from yesterday’s Crop Progress report, which showed winter wheat harvest at 54% complete, compared to the 39% average and 33% a year ago. This harvest pressure could limit any upside rallies for now. Furthermore, spring wheat conditions improved by 1% to 72% good to excellent, with only 4% of the crop rated poor to very poor.
• According to Argus, Ukraine’s 24/25 wheat crop production is estimated at 20.3 mmt, an increase from their previous estimate but still 2.2 mmt below last year’s level. The year-on-year decline is attributed to lower yields and harvested acreage.
• The EU’s Monitoring Agricultural Resources unit (MARS) estimates that Russia’s 24/25 wheat production may be below average, forecasting a crop of 82.5 mmt, about 5% under the average and down from 93.6 mmt in 2023. Frost damage in May and drought in June are cited as reasons for the yield decline.

DAIRY HIGHLIGHTS:

• The Global Dairy Trade auction fell 6.90% in today’s auction.
• Class III milk prices finished in the red today on poor global performance. The August futures contract saw the largest loss at 46 cents to close at $19.61/cwt. September and October futures are the only remaining Class III contracts still above $20.00/cwt.
• Spot cheese was able to shake off a poor GDT trade today and gain 1.3750 cents to close at $1.89/lb. Spot whey went unchanged at $0.49 cents.
• Class IV futures were slightly weaker on poor global results and a lackluster spot trade for its products. The 2024 Class IV average lost 2 cents to last trade at $20.81/cwt.
• Spot butter was unchanged in today’s spot trade at $3.1375/lb while powder lost a penny to close at $1.17/lb.

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

Brandon Doherty