CORN HIGHLIGHTS:

• The corn market turned sellers following the Juneteenth holiday on prospects of a high yielding crop from a relatively strong start to the growing season. The market also likely saw additional technical selling after breaking support at the 100-day moving average on the daily continuous charts.
• One private group is currently estimating US corn yield for the 2024 crop at 181 bpa, in line with the USDA’s current forecast and ahead of last year’s 177 bpa. While not all states’ yields are estimated to be higher, states like Minnesota and Nebraska are projected to be well above last year’s.
• For the months of July and August, US corn export FOB premiums are currently an 8 – 10 cent discount versus those from Brazil which could help improve US exports. Though not as large a player, Argentina’s corn export premiums remain the cheapest.
• Localized flooding is likely in areas of Minnesota and parts of the Dakotas, with an additional 3-5 inches of rain expected over the next few days. Meanwhile, the eastern Corn Belt is forecasted to experience highs in the 90s with some areas in the 70s overnight and limited rainfall over the next couple of weeks. Additionally, the European weather model indicates much lower humidity compared to the American model, suggesting less moisture in the air and potentially less rainfall than predicted by the American model.

SOYBEAN HIGHLIGHTS:

• Soybeans closed sharply lower in a day of poor trade across the ag complex. November soybeans took out this past February’s low as well as the low made in May of last year to post the lowest close since August of 2021. Pressure came from rain expected in the nearby forecast despite the extended forecast showing some heat and dryness. Both soybean meal and oil closed lower with meal leading the way down.
• Chinese imports of soybeans from the US jumped in May and were up 156% from the same period a year ago. China purchased 1.27 mmt of soybeans from the US as Brazilian supplies shrink due to the flooding in the southern region of the country. Overall, China has been attempting to become more resource independent which could hurt demand in the future.
• The weekly export sales report will be delayed until tomorrow due to the holiday week, but estimates are for soybean sales to be in between the range of 500k to 750k metric tons. It is likely that China will be a top buyer as they have made multiple purchases recently that have shown up in flash sales.
• Earlier this week, the NOPA crush report showed a crush number that was way above the average trade guesses, but the market did not react which points to trade that is focused on the weather. Crush demand should continue to be strong thanks to crush margins that have become more profitable in the past few weeks.

WHEAT HIGHLIGHTS:

• Wheat posted double-digit losses in all three US classes with little fresh news to offer bullish support. A higher US Dollar today, and another lower close for Matif wheat futures also did not help the situation, with those contracts at six-week lows.
• Wheat remains technically oversold in all three categories. This could indicate that a bottom is near, but with harvest pressure on the winter crops and falling European values, it may be difficult for US wheat to rally in any significant manner in the near term.
• Sov Econ has estimated Russia’s 2024 grain production at 127.4 mmt, down from 144.9 the year prior. This should be supportive to prices and may reflect the frost damage and drought conditions. However, some analysts are now estimating the Russian wheat crop at 82 mmt (up from 80) which is bearish.
• Monsoon rains in India should bring relief to grain growing regions in the north over the next few days. However, India will still likely need to import wheat to rebuild their reserves. In related news, India is said to have increased their domestic wheat prices in an effort to stimulate more production (which would ultimately reduce their need for imports).
• Ukraine’s 23/24 grain exports have reached 49.3 mmt as of June 19, which is up from 47.5 mmt a year ago. Of that total, 18.1 mmt is wheat, but the majority is corn at 28.2 mmt. In addition, Ukraine’s government has said the 2023 harvest totaled 81 mmt of grains and oilseeds, but the 2024 harvest could fall to 77 mmt.

DAIRY HIGHLIGHTS:

• Coming out of the midweek holiday, buyers returned to Class III futures. The Q3 months were up 16, 29, and 31 cents, respectively.
• This came despite a 0.875 cent drop in spot cheese to $1.89125/lb, which is now down 10.375 cents on the week. Whey was unchanged at $0.48/lb.
• Spot butter is now entering Friday down a penny on the week after falling 2.75 cents today, closing at $3.08/lb. Powder managed to pop over $1.20/lb.
• The July through November Class IV contracts were green today, ranging from 9 to 17 cent gains.

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Author

Brandon Doherty