CORN HIGHLIGHTS:

• Corn futures traded higher on Thursday with moderate gains as the market tested the key support level that was broken on Wednesday. Strong buying in soybeans and soybean products helped support the move higher in corn futures. July corn gained 3 ½ cents to 455 ¾, while December corn added 4 ¾ cents to 482 ¼.
• Bear spreading and pressure in the front end of the corn market could act as limiting factors to corn rallies. The July/December corn spread close at –26 ¼, a new contract low for the spread as old crop supplies remain under pressure from global prices.
• Weekly ethanol production slipped to 1,089 thousand barrels/day last week, down slightly from last week and up 3.1% over last year. A total of 107.1 mb of corn was used last week for ethanol production. This was nearly in line with the pace needed to reach the USDA marketing year target.
• USDA will release the weekly export sales report on Friday morning. For the week ending May 21, the range of expected sales is to be from 900,000 MT – 2.0 MMT. Last week’s sales were above expectations at 2.152 MMT.

SOYBEAN HIGHLIGHTS:

• Soybean futures ended the day higher, supported by gains in crude oil and strength in both soybean products, though the market remains rangebound. July soybeans gained 9-1/4 cents to $11.94-1/2 while November gained 12-1/2 cents to $11.94. July soybean meal gained $3.50 to $334.10 while July soybean oil gained 1.44 cents to 76.70 cents. July crude oil futures are up $0.59 to $89.28, and prices fell from highs earlier today.
• Much of today’s price action was driven by escalating tensions involving Iran and the Strait of Hormuz. Reports that the U.S. shot down Iranian drones prompted retaliatory threats from Iran, sending crude oil prices sharply higher early in the session. Later in the day, headlines surrounding a potential extension of the ceasefire and possible peace negotiations pressured energy markets off their highs, although no official agreement has been confirmed by President Trump.
• U.S. export sales and inspections for soybeans remain sluggish as U.S. beans are at a premium of $1.00 a bushel or more compared to offers from South America. Despite the summit in Beijing, Chinese purchases of US soybeans have not noticeably increased.
• Brazil has now replaced Argentina as the world’s leading export of soybean meal. Brazil has shipped 7.7 mmt during the first 4 months of the year, while Argentina has shipped 7.5. Argentina’s growth has been a bit stagnant, which has allowed Brazil to catch up.

WHEAT HIGHLIGHTS:

• After trading on both sides of unchanged, wheat futures finished the day mixed to mostly lower. Additional war premium was factored into the market overnight, while sharply higher crude oil prices provided early support. However, as strength in crude oil faded throughout the session, wheat futures also gave back their gains. In the July contract, Chicago gained 1-1/2 cents to 624, Kansas City fell 4-1/2 cents to 665-1/4, and MIAX declined 3-1/2 cents to 677-1/4.
• Rusagrotrans has raised their forecast of Russia’s May wheat exports from 2.9 mmt to 3.0 mmt. From the beginning of the month through May 25, shipments were said to total 2.5 mmt.
• According to SovEcon, Russia is expected to see total grain production for the 26/27 season at 137.4 mmt. This would be down from the 141.2 mmt the year prior. However, their total wheat estimate was increased by 0.7% to 90.3 mmt despite a 1.9% cut to spring wheat planted area.
• India’s agriculture ministry has estimated 25/26 wheat production at 120.66 mmt. This represents a 2.3% increase, and would be a new record if realized. In related news, the Indian government approved $2.7 billion over the next five years to strengthen the nation’s public distribution system of free food-grains.
• According to their federal statistics office, Russia’s April fertilizer output totaled 2.5 mmt, which is down 2.1% year over year. The reduction is being blamed on Ukrainian attacks on production facilities. This has the potential to intensify the problems with fertilizer cost and availability caused by the conflict in the Middle East.

DAIRY HIGHLIGHTS:

• Class IV futures settled with strong gains again as the second month June contract was 12 cents higher. The Q3 contracts all gained more than 40 cents.
• Spot butter was 1.50 cents higher to $1.6350/lb, up a dime on the week so far. Spot powder gave back 0.75 cents to move to $2.0850/lb.
• The Class III trade was mixed. June fell 17 cents to $16.35, while no other contract moved more than 7 cents from Wednesday’s settlement.
• Spot cheese lost a half cent today, settling at $1.46375/lb, while whey was unchanged.

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Author

Amanda Brill