Corn Sharply Higher on Continued Drought Concerns

• July corn futures added 36 cents this week to close at 640-1/4.
• December corn futures added 67 cents this week to close at 597-1/2.
• While temperatures are expected to be near normal over the next week, weather models tended drier for much of the Corn Belt over the next seven days.
• US corn-producing areas experiencing drought jumped 12% this week to come in at 57% with the latest update to the weekly drought monitor. 89% of the entire Midwest is experiencing some form of drought or dryness.
• With the strong surge to end the week, December corn futures managed to close over the pivotal 200-day moving average and knock on the door of the $6 psychological resistance. From the May 18th low of 490 to today’s high in December, corn futures have rallied over $1 per bushel.
• Continued market upside will surely be weather dependent but may be somewhat limited by selling competition from lower-priced Brazilian corn as safrina harvest is just getting underway.

November Soybeans 138 Cents Higher this Week

• July soybean futures added 80 cents this week to close at 1466-1/2.
• November soybean futures added 138 cents this week to close at 1342-1/4.
• 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 of 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.
• Weekly drought data revealed that 51% of the soybean crop is experiencing drought. Dryness in the eastern Corn Belt is expected throughout at least the next three days with better chances for showers in the western Corn Belt.  
• For the second week in a row, front-month soybean oil futures rallied over $5 per pound. Soybean meal futures also rallied sharply this week adding over 4% in the front-month contract.
• The annual soybean-free period is set to start in the major soybean-producing states in Brazil this week, the goal of the soybean-free period is to reduce the chance of any live soybean rust spores surviving from one growing season to the next.

Wheat Follows Corn and Soybeans Higher

• July CBOT wheat futures added 57-3/4 cents this week to close at 688.
• July KCBOT wheat futures added 44-1/4 cents this week to close at 842.
• July MGEX wheat futures added 41-3/4 cents this week to close at 853-1/2.
• As winter wheat harvest in the US is getting underway, harvest selling pressure will likely limit any continued upside move in wheat.
• Paris milling wheat futures gapped higher today, ending their session with gains of 3.75 to 4.75 Euros per metric ton. The condition of French soft wheat has declined for the third week in a row but conditions are still better than last year’s crop.
• El Nino could bring drought to Australia’s wheat-growing region. Historically El Nino has brought cooler temps and wetter conditions to the US and drier conditions to Australia.

Milk Markets Sharply Lower On the Week

• The remaining quarters for 2023 took heavy losses on the week, Q3 and Q4 fell 62 and 10 cents in Class III, respectively, while Class IV Q3 and Q4 fell 30 and 33 cents, respectively.
• Despite domestic and foreign demand for cheese being in a good place, the spot cheese market fell 4 cents per pound this week.
• The second month Class III contract fell to its lowest weekly close since January of 2021.
• US dairy cow culling for the week ending June 3rd, up 6.1% from the same week last year.