TFM Midday Update 06-07-2024

CORN

Corn is trading lower today after breaking the 7-day string of losses yesterday. July futures have faced resistance at the 100-day moving average at 452, and the December contract also moved lower after touching its 100-day.
Yesterday’s strength came from short covering by the funds who were estimated to buy back approximately 10,000 contracts after being heavy sellers the 7 previous days. It also came from good export sales numbers which were on the high end of expectations. Lower wheat today is likely dragging corn lower.
Yesterday’s Export Sales report showed an increase of 46.5 mb of corn sales in 23/24 and an increase of 4.5 mb for 24/25. This was on the higher range of estimates, and last week’s export shipments of 58.6 mb were well above the 38.9 mb needed each week to meet the USDA’s export estimate.

Soybeans are trading lower today and are giving back most of yesterday’s gains as selling pressure resumes by the funds. Both soybean meal and oil are trading lower as well, and the weakness comes despite a flash sale reported this morning.
This morning, private exporters reported sales of 104,000 mt of soybeans for delivery to China during the 23/24 marketing year. This is only the second soybean flash sale reported to China so far this year.
Part of yesterday’s strength in soybeans was related to potential changes in Brazil’s tax code that could make Brazilian exports more expensive and could boost US exports, but the tax code still needs to be approved by Congress in the next four months.

All three wheat classes are trading lower today with KC wheat continuing to lead the way lower. July Chicago wheat is now trading 95 cents below last week’s high as funds take advantage of the higher prices and farmer selling occurs.
World wheat stockpiles are expected to fall by 1.6% in 24.25 totaling 306.8 mmt. There is potential for production to fall in the EU, Turkey, the UK, and Ukraine. On the other hand, the US, India, and Australia are expected to have above normal production.
In Russia, the weather remains hot and dry which is taking a toll on the wheat crop there, and yesterday, SovEcon reduced their production estimate to 80.7 mmt while acknowledging that production could fall to under 80.0 mmt if conditions remain dry.

Amanda Brill