CORN HIGHLIGHTS:

• Strong selling hit the grain markets, pulling corn lower on the day as the recent rally’s momentum seemed to lose steam on Tuesday, and saw follow through selling on Wednesday. July corn futures fell back to test support at the 100-day moving average. This will likely be a key support level for Thursday’s session.
• Talk of strong producer selling of corn in the US, Brazil, and Argentina likely weighed on corn markets as the recent price rally provided opportunities for producers to get caught up on sales for both old and new crop bushels. The movement of corn has been reflected in a widening basis in some areas of the Corn Belt. South American sales moved more bushels to ports for export, creating competition against US corn.
• The USDA will release weekly export sales on Thursday morning. Expectations are for new sales from last week to be near the 700,000 mt – 1.0 mmt levels. On last week’s report, US exporters reported new sales of 759,000 mt.
• The USDA will release the next WASDE report on Friday morning. The May report will give the market its first estimates for the 24/25 marketing year and updates for the current marketing year. Old crop corn carryout is expected to decrease slightly, but 24/25 will likely show the potential for large production and increased carryout year over year.
• After the release of Friday’s USDA report, the planting pace will move back into focus for the market. Planting will continue to struggle as another weather system is moving across the Corn Belt this week. The forecast is showing a break in the weather in the middle of the month, but expectations are for a warm and wetter forecast into the end of May.

SOYBEAN HIGHLIGHTS:

• Soybeans finished the day significantly lower along with lower closes in both soybean meal and oil. Much of today’s downward pressure was likely due to profit taking following the recent rally along with positioning ahead of Friday’s WASDE report. Planting delays in the US along with flooding in South America has been supportive to this rally.
• Early trade estimates for Friday’s USDA report have the 23/24 soybean ending stocks relatively unchanged, and the ending stocks for 24/25 are estimated at 439 mb, using a soybean yield of 52.0 bpa. The Argentinian bean crop is expected to be revised lower to 49.7 mmt from 50 mmt, and Brazil’s production is expected to be lowered to 152.5 mmt from 155 mmt last month.
• In Argentina, there is a big problem with leaf hopper insects spreading disease among the corn crop, and there is a possibility that this could continue into further seasons, especially with warmer weather. As a result, many Argentinian producers are reporting that they will plant more soybeans than corn in the future in order to mitigate potential yield losses in corn.
• The flooding in Rio Grande do Sul has been a large impact on this rally and specifically has benefitted soybean meal as Brazil typically exports a portion of its bean crop to Argentina to be crushed. The flooding comes after a season that suffered through drought conditions as well further impacting yields in those areas.

WHEAT HIGHLIGHTS:

• Wheat finished with losses in all three classes today. The US Dollar Index has been trending higher the past two days, putting pressure on the market. Additionally, Matif wheat was down again today, offering weakness. Profit taking after the recent strong uptrend may also be considered a culprit for the lower trade today.
• Russia has reportedly reduced their wheat export tax by 3% to 3,171 rubles per mt, for the time period ending May 21. In other news, Russia is said to have been the lowest offer for Egypt’s wheat tender, at $255 per mt FOB. In a final note about Russia, Sov Econ has reported their wheat stocks at the end of April to be 27.5 mmt, which is 65% above the average.
• The flooding in Rio Grande do Sul in southern Brazil has caused damage to the soybean crop in addition to transportation and logistics issues. As it relates to wheat, the wet weather is also causing major delays to winter wheat planting in the region.
• A crop tour in Oklahoma has come up with a projected 2024 wheat crop at just over 89 mb, with an average yield of 33.68 bpa. These estimates were the result of field assessments led by educators from Oklahoma State University Extension, as well as crop consultants and agronomists.
• China has reportedly approved the safety of genetically edited wheat for the first time. Over the past year or so they have approved the use of certain GMO soybean and corn seeds as well. The key difference is that genetic editing involves altering the plant’s existing genes, while genetic modification involves the implementation of foreign genes into the plant’s DNA. This is a step forward for China as they work to become more self-sufficient with their agriculture.
• Later this week, record cold temperatures may hit parts of Russia and Ukraine, which may affect spring crops. However, damage to winter wheat is not expected to be much of an issue, as is evident by a lack of response from the market at this time.

DAIRY HIGHLIGHTS:

• June and July Class III milk futures saw limit up action on the day supported by a higher GDT yesterday and higher spot cheese trade today. June settled at $20.18/cwt while July settled at $20.01/cwt.
• Spot cheese had an impressive day which saw blocks improve 11.50 cents while barrels gained 2 cents. Spot cheese now sits at $1.92625/lb, which is at its highest level since August.
• Butter futures were unchanged on the day at $3.0225/lb while powder futures improved 1.50 cents to $1.13/lb.
• Class IV futures were little changed on light volume trading. May futures gained a penny to $20.30/cwt.

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

Amanda Brill