TFM Morning Update 06-03-2024

CORN

Corn is trading lower to start the week as the ag markets face continued selling pressure with funds entering new short positions. The July contract is now trading below all of its moving averages and is at a level of support.
Later today, the USDA will release its Crop Progress Report which will also includes the season’s first crop ratings. Weather has been mixed with heavy rainfall in parts of the country which could cause delays for the crop yet to be planted.
As of May 28, noncommercials reportedly added 12,315 contracts to their net short position which leaves the with a total net short position of 133,477 contracts. Open interest increased significantly last week pointing to the new shorts.

Soybeans are trading lower to start the week, and this is now the fifth consecutive day of lower prices for the July contract which has also fallen below all of its moving averages. Both soybean meal and oil are trading lower with bean oil posting the larger losses.
Soybean crush in the month of April has been estimated at 175.5 million bushels as analysts expect that the USDA will peg crush at a 7-month low. If realized, this would be down 13.9% from the 203.7 mb crushed in March and down 6.1% from April 2023.
Friday’s CFTC report showed funds as buyers of soybeans as of the 28th which has likely changed since that date. They bought 12,208 contracts which reduced their net short position to 14,218 contracts.

All three wheat classes are trading higher this morning with Chicago leading the way up as global weather remains a concern for traders. The areas being watched closely are Russia and the Black Sea region along with Europe.
Unlike the rest of the world, Australia is faring well with its weather, and as a result, may see its wheat crop rise by as much as 5.7% thanks to the rains. Their total production is estimated at 27.4 mmt.
Friday’s CFTC report showed funds as sellers of wheat just barely, only selling 838 contracts which leaves them net short 25,431 contracts.

Amanda Brill