CORN HIGHLIGHTS:

• Strong selling across the grain markets, led by wheat futures, pressured corn as prices pushed through key technical levels, triggering additional selling. July corn futures posted their lowest daily close since April 30 and finished under the key 450 price level.
• July and December Corn futures are trading 16 cents lower and 17 ¼ cent lower respectively on the week going into Friday’s trade. If prices finish lower on the week, weekly corn charts will be posting their second bearish weekly reversal in two out of the last three weeks.
• The USDA will release weekly export sales on Friday morning. Expectations are for new corn sales to range from 600,000 – 1,000,000 mt for old crop and 0 – 400,000 mt for new. Last week’s sales were 911,151 mt for old and 304,952 mt for new. Exports sales number will be key in helping to support prices for Friday.
• The Weekly Ethanol Production report saw a jump in production last week. Ethanol production recovered to 1.068 million barrels/day last week, which was an 8-week high, up 8.6% from last year. Corn used for ethanol production totaled 107 mb of corn last week, just above the total needed to reach the USDA market year forecast for corn usage.
• In currency trade, the Chinese Yuan dropped to its lowest levels against the US Dollar since November. The reduced buying power of the yuan could continue to limit potential Chinese purchases of corn and soybeans in the near future.

SOYBEAN HIGHLIGHTS:

• Soybeans ended lower for the third consecutive day in ugly trade across the grain complex. Soybeans were pressured by poor demand, advancing crop progress, and lower closes in both soybean meal and oil. Both July and November soybeans remain above their 100-day moving averages.
• Chinese demand has been exceptionally poor with no purchases made so far for new crop US soybeans, and now it is being reported that China has been exporting soybean meal rather than importing it due to weak domestic demand. The Chinese hog herd has been shrinking which has caused the drop in demand.
• On June 12th, the USDA will release its WASDE report, and if exports don’t pick up significantly, yearly exports are expected to be cut by between 20 and 30 million bushels. So far, China has purchased no new crop US soybeans, and new crop sales are the lowest in 18 years.
• There has been a general lack of news, especially regarding export sales which have been very slow with Brazil and Argentina getting most of the Chinese business. While US Gulf offers have become more competitive with Brazil, this is not the typical export window for the US, and domestic demand will be crucial.

WHEAT HIGHLIGHTS:

• Wheat closed with double-digit losses in all three classes. Today appeared to be a risk off day for the commodity complex with a lower trade in row crops, soybean products, cattle, and energies, to name a few. There was also a lack of fresh, friendly news to push wheat higher.
• The European Union is said to have agreed to increase tariffs on Russian grain imports, in an effort to reduce the Kremlin’s profits while also preventing the imports from undermining the European farm sector. The tariffs will reportedly begin on July 1, and will affect cereals, oilseeds, and derived products.
• As reported yesterday, India is expected to eliminate their 40% tariff on wheat imports, starting in June. This would mark the first time India will import wheat in six years and will also allow traders and millers to buy from other producers, which is likely to include Russia. The reasoning behind this decision is said to be a way to replenish reserves and reduce domestic prices. In April, India’s wheat stocks fell to 7.5 mmt, which is the lowest in 16 years.
• According to the USDA, as of May 28, 25% of the US winter wheat area is experiencing drought conditions; this is unchanged from last week. Additionally, the area of US spring wheat in drought also remained steady with the previous week at just 3%.
• The Australian Weather Bureau is anticipating that the month of June will be drier than normal. However, they expect a wetter pattern to develop in July. Furthermore, they anticipate a wheat crop of 28 to 30 mmt, in line with the USDA’s figure of 29 mmt.

DAIRY HIGHLIGHTS:

• Class III futures were mixed but mostly higher. The soon-to-be second month July contract was down a nickel to $19.86. but all other 2024 contracts were green.
• Spot cheese closed down a penny to $1.8750/lb. This makes eight lower trading days in a row totaling a 15.875 cent move off the 5/17 peak.
• On the Class IV side, only the July contract moved today as it gained a penny to close at $21.14. Total volume was a light 7 contracts, all in the Q3 months.
• After falling 14.75 cents in the last two days, spot butter was up 5.50 cents to move back over the $3.00/lb mark.

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Author

John Heinberg