CORN HIGHLIGHT

• Following through on Monday’s rally, corn and wheat found technical buying strength on Tuesday, as prices finished higher with moderate gains. The corn market is still lacking overall bullish news, but prices are oversold and ready for a technical bounce.
• The corn market may be adding some weather premium as forecasts show above-average temperatures and below-average moisture across the Corn Belt going into early June. Rain chances are limited in the near-term forecast, but a potential storm system for the week of June 5 may be a key potential rainfall for the Corn Belt.
• The USDA reported that corn planting was 81% complete as of May 21, up from 65% last week. North Dakota remains a laggard at 36% complete versus the 5-year average of 50%. It is estimated approximately 2.6 million corn acres are unplanted as of May 21 with prevent plant date on May 25.
• Demand news is still a concern. Weekly ethanol statistics will be released on Wednesday, and the market will be looking for an uptick in the usage of corn used to produce ethanol. This usage category is also trailing the pace needed to reach the USDA’s market year target.

SOYBEAN HIGHLIGHTS:

• Soybeans closed lower along with both soybean meal and oil. The move comes due to lower palm oil futures and planting pace that is ahead of schedule, despite higher crude oil prices.
• The USDA reported that 66% of the soybean crop has been planted as of May 21, and 36% has emerged. Planting is 10 percentage points ahead of where it was in 2016, which was the year the US recorded the highest soybean yield.
• The planting delays in North Dakota may provide the market with some support as they are only 20% planted due to wet fields. Apart from North Dakota, the US is on track for a large crop.
• Reports of Chinese cancellations of palm oil purchases and a large EU rapeseed crop added resistance to soybean oil, and soybeans.
• Non-commercials sold an estimated 4,000 contracts of soybeans and 5,000 contracts of soybean products, and at this point they may have taken a net short position in soybeans.

WHEAT HIGHLIGHTS:

• Leading the way in the grain complex, all three wheat classes posted double-digit gains despite reports of an additional 210k mt of EU wheat being imported into the US.
• The USDA reported that 31% of the winter wheat crop was rated good to excellent, up 2% from last week, and 61% of the crop is headed, versus 49% last week, in line with the 5-year average.
• Winter wheat condition is rated only 10% good to excellent in both Kansas and Oklahoma, reiterating the fact that the crop is struggling in the southwestern Plains.
• The USDA reported that 64% of the spring wheat crop was planted as of May 21, versus 40% last week, down from the average of 73%.

DAIRY HIGHLIGHTS:

• With a close at $16.55, June Class III futures have put together three positive closes in a row totaling 63 cents.
• Spot cheese is up 11.25 cents in the last three trading days as well to push back under $1.60/lb, a nice reaction after testing multi-year lows last week.
• Spot whey was up a half-cent today after hitting a new all-time low of $0.2550/lb on Monday. That market remains an impediment to Class III momentum.
• Class IV action is quiet with the Q3 months holding small gains. Both spot butter and powder were lower on the day on no loads traded.

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

Brandon Doherty