CORN HIGHLIGHTS:

• Despite strong overnight prices in the corn market, the sellers held their grip on the old crop futures, pushing July to its lowest close since December. The selling pressure trickled into new crop prices, finishing the December contract with marginal losses on the session. July corn has traded lower for 4 of the past 5 sessions and nearly 50 cents off the most recent high.
• Overnight strength came from news of U.S.-China trade talks set for this weekend in Switzerland, sparking short covering. However, futures failed to break resistance and faded through the day session.
• Ethanol production averaged 1.020 million bpd last week, down 1.9% from the prior week but still 5.9% above last year. Ethanol stocks remain heavy at 25.191 million barrels, while corn use for ethanol totaled 102.91 mb — on pace to meet USDA targets.
• USDA will release weekly export sales on Thursday morning. The trend in export sales has been supportive of corn prices as accumulated sales are trending well ahead of the USDA totals to reach the marketing year export target. Last week, export sales totaled 1.014 MMT.
• Weather models remain friendly for possible rapid planting pace. Temperatures across most of the corn belt are expected to be above normal and drier than normal precipitation. If the current pattern holds, some areas will turn significantly dry and may be in need of precipitation to aid early development of the corn crop.

SOYBEAN HIGHLIGHTS:

• Soybeans ended mixed in bear spreading action, with front months lower and deferred contracts higher. Prices faded from overnight highs after news of planned U.S.-China trade talks. Soybean meal firmed, while soybean oil followed crude lower.
• Despite progress on U.S.-China talks, trader skepticism over a quick resolution weighed on futures throughout the session. Without a deal before harvest, demand concerns could pressure prices further.
• Over the next two weeks, the weather is forecast to be warmer and drier than normal in the corn and soy belts. While some areas have received rain over the past few weeks, many already have low soil moisture levels which could become a bigger problem given a drier summer.
• In Brazil, the Mato Grosso Institute for Agricultural Economics (IMEA) has projected that state’s soybean production at 50.89 mmt. If realized, this would be a 30% jump over 2024 production. This is said to be due to higher estimated acreage and yields. Over the past few years, Mato Grosso has produced nearly one-third of Brazil’s soybeans.

WHEAT HIGHLIGHTS:

• Wheat futures ended lower, with Chicago posting small losses while Kansas City and Minneapolis saw steeper declines. Pressure on hard red wheat followed the Oklahoma Wheat Commission’s production forecast of 101.2 mb — marking a second consecutive year above 100 mb. Western Kansas also received beneficial rains, and a firmer U.S. Dollar plus weakness in Matif wheat added to the downside.
• Early strength was tied to reports that U.S. and Chinese officials will meet in Switzerland this weekend to discuss trade — a broad boost for the grain complex, though direct benefits may lean more toward soybeans and corn.
• On a bullish note, the Henan province in China is expected to see a windy weather pattern, along with hot and dry conditions; this province produces about a third of China’s wheat. Drought continues to expand throughout China’s wheat belt, which could mean that they will need to import down the road. Also supportive is the fact that U.S. SRW wheat is currently the world’s cheapest. Furthermore, U.S. HRW wheat at the Gulf is said to be at a 25-cent discount to Russian wheat.
• Global turmoil is likely to continue to inject volatility into commodity markets. News outlets have reported that India launched an attack on Pakistan overnight in response to an attack last month on tourists that resulted in 26 deaths. Pakistan also claims to have shot down several Indian jets. This has raised concerns about war brewing between the two nations.

DAIRY HIGHLIGHTS:

• Class III milk futures continued to gain momentum today, with the June contract rising 42 cents to close at $19.02, and July advancing 45 cents to settle at $19.18.
• Spot cheese followed the upward trend in Class III milk, gaining 2.125 cents to close at $1.8100/lb. Spot whey also posted gains, rising 2.50 cents to settle at $0.5500/lb.
• Spot butter declined, giving back 1.75 cents to close at $2.3225/lb, while spot whey gained 1.75 cents to settle at $1.2175/lb.
• Class IV futures saw gains today, with the June contract up 18 cents to close at $17.72 and the July contract rising 22 cents to settle at $18.18.

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Author

Brandon Doherty