CORN HIGHLIGHTS:

• Choppy, two-sided trade in the corn market to end the week. Overall strength in the wheat market helped support corn futures, but prices failed to push through resistance before turning softer into the close. For the week, July corn futures closed 7 cents higher.
• May options expired today, and that may have accounted for the end of session selling pressure. Price volatility may continue Monday with First Notice Day for May grain contracts on Tuesday, May 30.
• Weather models are shifting to a warmer and more active pattern going into early May. The western corn belt likely showed good planting activity and progress, but the eastern corn belt saw limited progress. Last week, corn planting reached 12% complete nationally.
• Recent rainfall has proven beneficial for areas experiencing moisture deficits, as evidenced by Thursday’s drought monitor maps, which indicated a contraction of the drought area. Moreover, forecasted rainfall for the upcoming week is expected to contribute to further moisture recovery. Presently, approximately 23% of corn acres are affected by some form of drought.
• Cash market have likely helped support corn futures this week. The average US corn basis levels have firmed in most cash markets. End users are trying to pull bushels in to meet demand, as producers are focused on planting this year’s crop.

SOYBEAN HIGHLIGHTS:

• Soybeans closed lower for the day with this being the third consecutive lower close in the July contract after three days in a row of gains. Prices have faltered and been unable to close above the July 20-day moving average for the past two days. Soybean meal ended the day lower while soybean oil was higher along with both palm and crude oil.
• For the week, July soybeans gained 11 ½ cents at 1177 ¼, November soybeans gained 13 ¾ at 1174 ¾, July soybean meal gained $1.50 at $344.70, and July soybean oil gained 0.60 cents at 45.54 cents. While soybeans bounced well off their recent lows, there was less bullish news regarding them than in corn and wheat.
• The Brazilian harvest is essentially complete, whereas Argentina’s crop is in good shape with harvest underway. Meanwhile, US soybean planting is moving along with wet conditions. This compares to corn which is struggling in South America and may see production revisions lower.
• In Argentina, the 23/24 corn harvest is now called at 19.8% complete which compares to 17.2% the previous week. Prices may have found some support with leaf hopper insects transmitting a disease among the Argentine crop that will cause yields to drop. Additionally, the corn crop is dealing with dryness and heat.

WHEAT HIGHLIGHTS:

• Wheat managed to eke out another positive close in Chicago futures, although they finished well below the daily highs. Conversely, KC and Minneapolis contracts displayed more strength, with July Chicago rallying above the 200-day moving average for the first time since July 2023. However, the rally encountered strong resistance as it retreated below the 628 level by the close.
• Storms sweeping across the central Midwest are expected to bring drought relief to many areas, although regions such as southwest Kansas and the panhandles of Oklahoma and Texas were largely unaffected. This discrepancy may result in further declines to the HRW crop rating next week and could explain why KC wheat closed notably stronger than Chicago wheat today.
• The US Dollar Index continues to chop around with back-and-forth action. Despite being in a downtrend since mid-April, its strength today may have contributed to the decline in Chicago futures by the close. Moreover, technical indicators suggesting that Chicago wheat is overbought may have added to the weakness.
• The International Grains Council forecasts a US wheat crop of 1.94 billion bushels for 24/25, potentially the largest in eight years. This projection could limit long-term upside movement for futures from a fundamental perspective.
• The European Commission has revised down its estimate of Europe’s 24/25 soft wheat crop to 102.2 mmt, compared to 120.8 mmt in March. Additionally, exports are forecasted at 31 mmt, with stocks at 12.2 mmt. This decline may be attributed to excessive wet weather in certain areas, with the French wheat crop now rated at just 63% good to excellent, the lowest in four years.

DAIRY HIGHLIGHTS:

• Class III futures pulled back on the day after seeing big gains just a day before. May and August futures saw the biggest losses at the close of 15 and 14 cents respectively.
• Spot cheese improved 0.6250 cents to $1.76125/lb on a solid week of trading. Spot cheese has now closed higher for the 5th week in a row to mark its highest level since September.
• Class IV futures saw slight gains improving the 2024 Class IV average to $20.50/cwt.
• Spot butter gained 0.25 cents on the day and 5 cents on the week to close at $2.97/lb. This was butters highest weekly close since October.

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Author

Brandon Doherty