The CME and Total Farm Marketing offices will be closed
Monday, June 19, 2023, in observance of Juneteenth

CORN HIGHLIGHTS:

• Corn prices surged higher on Thursday, fueled by concerns regarding weather forecasts remaining dry across large portions of the Corn Belt. Strong technical buying pushed prices through levels of resistance. December corn closed at its highest price level since February 27 and is trading 44 cents higher on the week.
• Current drought monitor maps reflect the impacts of dry conditions across the Corn Belt as the overall drought area expanded last week. With today’s weekly update, an estimated 57% of corn production areas in the US are experiencing some form of drought.
• Weekly export sales were still disappointing last week, but the U.S. did sell 273,300 MT of old crop corn. This was the largest weekly total for old crop corn sales in the last five weeks.
• Outside markets were supportive of the grain markets on Thursday as equity and energy futures saw buying support, helping build a “risk-on” trade during the day.
• The weather forecast overall remains spotty as rainfall coverage is expected to be hit-or-miss for the next seven days. Temperatures are forecasted to warm over the Corn Belt, which will likely increase crop stress.

SOYBEAN HIGHLIGHTS:

• Soybeans skyrocketed higher today along with both soybean meal and soybean oil, which gained nearly 4.50%. NOPA crush was released and was supportive, and weather forecasts have trended slightly drier into next week.
• NOPA US crush for May 2023 was pegged at 177.915 mb of soybeans, which was a record for the month and 4% above May 2022. Soybean oil stocks came in at 1.872 billion bushels, which was below all trade guesses, and the average guess was 1.942. Stocks were up 5.5% from May 2022.
• The dry weather has added support to the soy complex as well as the corn market, although soybeans have a wider window for beneficial rain to fall. Soil moisture has been extremely short in the eastern Corn Belt, and good rains will be needed to offset the coming high temperatures.
• Argentina’s Rosario grain exchange cut their soybean production estimate again today by 5% to 20.5 mmt. The previous estimate was 21.5 mmt, both way below the USDA’s 25 mmt estimate.
• Export sales for soybeans showed an increase of 17.6 mb for 22/23, which was up from the prior week and the 4-week average. There was an increase of 1.8 mb for 23/24, and last week’s export shipments were 5.2 mb, down 43% from the previous week and 41% from the prior 4-week average.

WHEAT HIGHLIGHTS:

• The USDA reported an increase of 6.1 mb of wheat export sales for 23/24.
• Spillover support from corn and soybeans certainly helped the wheat market rally today. The current weather market environment is sure to remain volatile, especially with markets closed Monday for the Juneteenth holiday.
• Both the American and European weather models are aligning to show a dry forecast for the next 10 days across most of the Corn Belt, and this likely led to today’s rally. Short covering may have also played a part, especially in wheat, where the funds are said to still hold a net short of about 115,000 contracts.
• The US Dollar Index was sharply lower today, which eased pressure on the wheat market, allowing it to run. In general, wheat and the US Dollar have an inverted relationship, meaning that when the dollar trades lower, wheat tends to trade higher (and vice versa).
• The Russian government is said to have established a $240 per ton price floor on wheat exports for July and August. It remains to be seen if exporters will adhere to this, but these export values are far below US prices and may limit upside potential.

DAIRY HIGHLIGHTS:

• 2023 Class III futures were lower once again as July dropped another 18 cents to close at $15.38.
• Traders took the day off in the Class III spot market today with only one load trading between blocks, barrels, and whey, with all unchanged.
• Conversely, Class IV products were both lower with butter down 1.50 cents and powder down 0.75 cents.
• Milk futures were unchanged in the nearby for Class IV but down double-digits from August 2023 through February 2024.

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Author

John Heinberg