CORN HIGHLIGHT

• Corn markets saw technical selling follow through from the softer price action from Monday’s close. Historically, high corn planting pace and strong selling pressure in the soybean market added to the selling pressure.
• US corn planting moved to 65% planted, which was slightly below expectations, but still 6% above the 5-year average. Key corn-producing states of Iowa and Illinois were over 80% complete, while northern states are still lagging the multi-year averages.
• Crop emergence was also above 5-year averages as 30% of the crop has germinated. This was up from 12% last year at this time and a 5-year average of 25%.
• The overall weather forecast stays supportive for the majority of the Corn Belt with above-average temperatures and rainfall average to below, which should keep the planting window over the next couple weeks very favorable.
• July corn could find support on the lack of producer selling and a friendly cash basis as producers are looking to complete crop planting. Selling pressure seemed to slow near the 580 price level, which held into the close. Dec corn charts look more technically challenged, placing a new near-term low on Tuesday, pressured by a potentially growing corn supply picture.

SOYBEAN HIGHLIGHTS:

• Soybeans closed sharply lower led by a big selloff in soybean oil, and though soybean meal was the strongest leg in the complex, it closed lower as well.
• Further pressure came from yesterday afternoon’s planting progress which showed soybean planting 49% complete and 13% above the 5-year average. Iowa and Illinois led the way at 69% and 77% respectfully, but North Dakota lags at just 2%.
• While crude oil was slightly lower, the recent decline in palm oil has been a large bearish factor for soybean oil as demand from India decreases.
• South American crop watcher, Dr. Michael Cordonnier, raised his production estimate for Brazil’s crop to 155 mmt, matching the USDA’s estimate, but left his estimate for Argentina’s crop unchanged at 23 mmt, versus the USDA’s 27 mmt.
• Outside markets may have been a factor in today’s selloff as fund managers are weary of the future of the economy, though there are upcoming meetings to raise the debt ceiling.
• With Argentina’s soybean production so small, they will have trouble meeting export expectations for soybean meal, and the US will likely pick up some of that business which would be friendly. Yesterday there was a reported sale of soybean meal to Poland from the US.

WHEAT HIGHLIGHTS:

• Despite heavy selling pressure in the grains, wheat had an overall mixed close. Chicago was red across the board, but both Kansas City and Minneapolis contracts ended the session with some green.
• The winter wheat crop was rated 29% good to excellent, which is unchanged from last week. However, the Kansas wheat tour will likely find dismal conditions, with 68% of their crop rated poor to very poor.
• According to the USDA, 40% of the spring wheat crop has been planted, compared to 57% average.
• There has still not been an agreement on the Black Sea Grain Initiative. The deal is set to expire on May 18th and Ukraine will reportedly host online talks. However, Russia does not appear to want to allow an extension.

DAIRY HIGHLIGHTS:

• Tuesday’s Global Dairy Trade auction saw the GDT price index fall 0.90%, snapping a 2-event up streak.
• Within the event, the GDT cheddar price fell 3.40% to $1.9975/lb. This compares to the US second month futures price of $1.7030/lb.
• Class III and IV milk futures were on the defensive once again. June Class III fell 8c to $16.33 while June Class IV lost 2c to $18.19.
• Cheese buyers bid the block market up 3.50c to $1.5050/lb while barrels lost another 2.75c to $1.4475/lb.
• Second month class III hit its lowest price since August 2021.

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Author

Brandon Doherty