CORN HIGHLIGHTS:

• Corn prices traded lower on the session as strong selling pressure in the wheat market, and the weather forecast staying on the wetter side for the Corn Belt going into next week limited buying interest.
• On Friday, the USDA will release the June WASDE report, and after the recent rally prices may have been squaring up and profit taking going into that report at the end of the week. The June WASDE is expected to show a weaker demand tone and overall increasing corn supplies.
• The USDA will release the weekly Exports Sale report on Thursday morning. U.S. corn export sales are expected to remain weak as US exporters struggle for business against cheaper global competition.
• Overnight and afternoon weather models are still looking for a change in the current weather patterns, moving to a cooler and wetter overall pattern next week. If realized, the weather premium in the market will likely be pulled out on the fear of improved production with the beneficial rain.

SOYBEAN HIGHLIGHTS:

• Soybeans were mixed today with front month July ending higher, but the deferred contracts closing lower as forecasts turn wetter. Soybean meal was bull spread and soybean oil closed lower despite higher crude oil.
• Traders have been fixated on weather and lately it has turned to a more favorable cooler and wetter forecast over the next 7 days. Old crop supplies remain tight supporting the July contract.
• Friday’s WASDE report will likely show a revision to Argentinian production to be lower as the USDA has lagged behind other analysts to reflect the damage the drought has done to the soy crop. Trade will also look for an old crop carryout of 223 mb and 345 mb of new crop.
• US soy exports have been slow due to Brazil’s significantly cheaper offerings, and analysts are now expecting June exports to be 13.1 mmt vs 9.9 mmt a year ago with China as the major buyer.

WHEAT HIGHLIGHTS:

• Russia’s FOB offers are now said to be as low as $229 per metric ton. This is pressuring the US export market, as well as futures prices. Additionally, Egypt purchased 55,000 mt of wheat from Russia at some of these low levels.
• Despite the recent news that a Ukrainian dam was destroyed by Russia, wheat traded sharply lower today. The damage is said to have caused flooding in agricultural areas, but the trade does not appear concerned.
• Russian spring wheat areas could be facing drought with temperatures as high as 90-100 degrees. And due to the El Nino weather pattern, Australian wheat production could also be reduced below what the USDA is estimating to just 26.2 mmt.

DAIRY HIGHLIGHTS:

• Cheese buyers aggressively added 11 loads of inventory on Wednesday, pushing the block/barrel average to its highest price since May 10th up to $1.5875/lb.
• 6 loads of block cheese traded hands between $1.4675/lb and $1.55/lb, while ending the session at $1.5225/lb.
• Buyers may be reacting positively to this week’s Global Dairy Trade auction that saw GDT cheddar add 7.40%.
• July Class III added 24c to close at $16.53 per cwt. This is up $0.62 from its recent low.
• The rest of the spot trade was mixed. Butter fell 1.75c, powder fell 0.25c, and whey was unchanged.

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Author

John Heinberg