CORN HIGHLIGHTS:

• Corn futures faded into the end of the session and finished the day with marginal losses as selling pressure in the row crops limited the market. The corn market failed to find any traction despite a strong day of buying in the wheat complex.
• The USDA released the latest Crop Progress report on Monday afternoon. Corn planting advanced another 4% to 95% complete, in line with 5-year averages. Early corn crop conditions slipped 1% to 74% good/excellent. This is the strongest rating since 2020 and 13% higher than last year for this time frame.
• In currency markets, the Brazilian Real has moved to its lowest point versus the US Dollar in over a year and a half. The break by the real has triggered selling of corn from the Brazilian producer, limiting the markets upside potential.
• The USDA will release the June Crop Production report on Wednesday at 11:00 CST. Expectations are for the balance sheet to see light reductions in old and new crop corn carryout on Wednesday. The market will be looking for any adjustments in the South American corn production estimates and any potential changes in corn demand on the report.
• Weather models are predicting above normal temperatures to move into the Corn Belt into late June. Early indications are for the heat to be joined by an active rainfall pattern. The key for the market will be the extent of the heat and does the moisture stays in the forecast going into July. After tomorrow’s report, the market focus will shift back to the weather.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower after fading from higher prices overnight, and were mainly driven down by soybean meal and yesterday’s Crop Progress report which showed the highest initial good to excellent ratings since 2018. July soybean meal lost 2.36% to $359.30, and soybean oil was mixed with July and August slightly higher, and the deferred contracts lower.
• Yesterday’s Crop Progress report said that 87% of the soybean crop has been planted, which was slightly below the trade guess of 89% and below last year’s pace of 95%. It also compares to 78% a week ago and the 5-year average of 84%. 70% of the crop has emerged which compares to 83% a year ago, and the crop received its first rating of the year at 72% good to excellent which compares to 59% a year ago.
• Tomorrow, the USDA will release its WASDE report, and although no large changes are expected, 24/25 ending stocks are expected to increase slightly by 5 mb to 455 mb which would be the highest in five years if realized. The other bigger changes could see Brazilian production lowered due to the flooding in Rio Grande do Sul, but on the bearish side, exports may be revised lower.
• Yesterday’s Export Inspections report was relatively soft with soybean inspections totaling 8.5 mb for the week ending June 6. Total inspections for 23/24 now total 1.490 billion bushels which is down 17% from the previous year. With export sales poor in general, there is a possibility that the USDA will lower exports in tomorrow’s WASDE report.

WHEAT HIGHLIGHTS:

• Wheat closed higher in all three US classes, breaking the nine consecutive session losing streak for July Chicago. This may be, in part, a technical correction from oversold conditions. Furthermore, July Chicago wheat tested the 100-day moving average (604 level), finding support there before rebounding to a sharply higher close. Matif wheat futures also offered a boost with their strength today; the front month September gained 7.5 euros, closing at 246.50.
• Ahead of tomorrow’s WASDE report, the trade is anticipating US 24/25 all wheat production to be 1.887 bb, up from 1.858 bb in May. Additionally, the average pre-report estimate for US 23/24 wheat carryout is 690 mb, slightly higher than May’s 688 mb. For 24/25, the estimate is 782 mb compared to 766 mb in May.
• In yesterday afternoon’s Crop Progress report, winter wheat was rated 47% good to excellent, compared with 49% last week and 38% last year. 12% of that crop is said to be harvested versus 6% on average. As far as spring wheat, the crop is 98% planted, 87% emerged, and is rated 72% good to excellent, as compared to 74% last week but well above the 60% rating from last year.
• According to the head of Russia’s grain union, between 15-30% of their winter grain was affected by frost damage in May. This is said to be higher than the estimate by the Russian ag minister and may have contributed to today’s strength. In related news, Russia’s ag minister said that they will shift their export focus to the Middle East and North Africa, while also strengthening relations with India and China.
• Domestic wheat prices in Brazil are said to have significantly increased in early June, due to a lack of supply in their offseason. According to Secex data, Brazil imported 657,130 mt of wheat in May, representing a 44.6% increase from the previous month, and up 131.8% from May 2023.

DAIRY HIGHLIGHTS:

• Each US spot dairy product finished Tuesday steadily higher, with cheese adding 4c, butter up 2.50c, and whey and powder up 0.50c each.
• Both Class III and IV milk futures traded mixed with July Class III down 8c to $20.53 and July Class IV adding 7c to $21.55.
• US spot whey hasn’t had a down session since May 29th and is already up 6c so far this month to $0.4750/lb. This should help support a higher Class III market.
• The spot cheese block/barrel average has added 7.25c over the past two sessions as buyers return to add to inventories.

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Author

Brandon Doherty