CORN HIGHLIGHTS:

• Strong selling pressure gripped the corn market on Tuesday as New Crop prices closed down over 4% lower as improved weather forecasts outweighed the USDA crop ratings from Monday afternoon.
• The USDA released weekly corn crop ratings on Monday afternoon. The corn conditions dropped an additional 5% to 50% good/excellent. The state of Illinois is still the focus of the market as rainfall missed many areas of the state over the weekend and ratings were at 26% good/excellent last week, down 10% from the prior week. These are the worst ratings since 2012.
• Sellers took control of the market as weather forecasts for the next two weeks look to bring plenty of chances for rainfall to most of the Midwest. If realized, this could help stabilize the crop as pollination is right around the corner.
• AgRural estimates that Brazil’s safrinha corn, or second crop corn, is 9.3% harvested. They estimate the safrinha crop at 97.9 MMT and the total corn crop estimate at 127.4 MMT. The influence of fresh supplies to the market is a wet blanket on rallies.

SOYBEAN HIGHLIGHTS:

• Soybeans closed lower today along with soybean meal, while soybean oil closed higher. A wetter forecast for the Corn Belt over the next week has put pressure on corn and beans while rising world veg oil prices have given soybean oil support.
• At the moment, traders are clearly fixated on weather forecasts, because yesterday’s Crop Progress report showed the worst good to excellent ratings since 1988 at just 51%, down 3% from the previous week, but the selloff today was due to increased chances for widespread rain.
• The next report to watch will be Friday’s Quarterly Stocks and Acreage report, where analysts are expecting soybean acres to increase slightly to 87.67 million acres from 87.45 million acres in the previous report.
• Yesterday’s soybean inspections were poor as Brazil keeps control of the export market with their cheaper soybean offerings. Due to slow US sales, exports may be lowered in the next WASDE report.

WHEAT HIGHLIGHTS:

• All three US wheat futures classes posted double-digit losses. No support was received from Paris milling wheat futures, which gapped lower and also saw a sharp decline. Spillover pressure from lower corn and soybeans did not help.
• The increased chances of rain for some parts of the central Midwest likely has funds jumping back into the market. While the actual weather impact to the wheat crop at this point should be minimal, pressure from lower row crop prices is expected to weigh on wheat as well.
• US winter wheat harvest is well behind the average pace of 33% complete for this time of year, with only 24% of the crop collected. And while at this point the impact is minimal, the USDA did say winter wheat conditions improved 2% from last week to 40% good to excellent. Spring wheat conditions did decrease by 1% from last week to 50% GTE.
• Russia continues to rule the wheat export front, with FOB offers said to range between $230 and $240 per ton. This is well below US or European offers and is keeping pressure on futures prices.
• The 100-day moving average for Chicago wheat is around 713. This may act as an area of support, especially if traders catch wind of some friendly news. If there is a bright spot, it is the fact that Russia is said to already be blocking grain shipments in the Black Sea and may not renew the corridor deal on July 18th.

DAIRY HIGHLIGHTS:

• The spot cheese block/barrel average lost another 5.625c on Tuesday, and is already down 10.25c this week. The closing price of $1.35/lb is its lowest close since April 2020.
• A total of 23 loads of inventory traded hands at multi-year lows.
• Nearby Class III milk futures went to new contract lows with cheese now in the $1.30’s. July Class III fell 51c to $14.35. This follows yesterday’s 49c drop.
• The spot powder and spot whey markets were both down 0.75c on Tuesday.
• The lone bright spot for the dairy trade was that spot butter was bid 4c higher to $2.40/lb. This helped support Class IV, but the market was still softer overall.

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Author

John Heinberg