CORN HIGHLIGHTS: 

• Buyer strength led by good front month spread action and short covering in the wheat market spilled over into the corn market again on Friday, as July corn closed the week with double-digit gains.
• The corn market forged a good rally in the second half of the week as money moved into the long side of the market despite a fundamental picture that is negative in the short term.
• Demand concerns stay a focus of the corn market as weekly export sales totals this past week posted net cancellations for the first time in 20 years. There was talk on Friday that China was a buyer of South African corn, still looking away from the U.S. for corn supplies.
• Despite some areas of potential rainfall, extended forecasts are favorable for improved planting pace for this year’s corn crop. The market will be watching the planting pace in northern states closely next week.
• Next week will set up a battle between favorable technical signals and possible bearish fundamentals as the market prepares for the May 12 USDA WASDE report and our first projection for the 2023-24 marketing year.

SOYBEAN HIGHLIGHTS:

• Argentina’s soybean harvest is estimated to be about 20% complete with yields coming in near 17 bpa, suggesting a crop of only 18 mmt versus the USDA’s April estimate of 27 mmt.
• Lending further support to soybeans, soybean oil gained on follow-through strength from strong weekly export sales and palm oil, which was up nearly 5% overnight. Additionally, crude oil posted gains of about $2.95, or about 4.25%.
• With Brazil’s offers for September delivery having rallied about 60 cents in the last few days for September and making US offers more attractive, it has been rumored that China has purchased US soybeans out of the PNW for October delivery.
• Soybeans continue higher with follow-through buying from Wednesday’s reversal. Strong resistance lies near Tuesday’s high of 1440, and if the market can break through that area, it could be set up to test the 50-day moving average near 1462.

WHEAT HIGHLIGHTS:

• Strong short covering in the three classes of wheat futures continues to push prices higher into the end of the week. Wheat futures have likely found a near-term bottom on Wednesday, and prices have rallied into today’s close.
• Fueled by crop concerns, KC hard red winter wheat prices have rallied nearly $1.00 off Wednesday’s lows fueled by the Oklahoma crop tour forecasting the worst Oklahoma winter wheat crop since 1955. The Kansas wheat tour kicks off on May 15, with similar results expected.
• The wheat market will stay focused on the May 18 deadline for a possible disruption of the Black Sea grain deal, as increased tensions, and constant rhetoric out of Russia may put the agreement lasting in jeopardy.
• In the northern plains, spring wheat planting is delayed, and forecast for precipitation over the weekend might further stall progress and concerns for production of the crop.
• Despite the late week rally, Managed funds are likely to show a near record short position in the wheat market on Tuesday when the Commitment of Traders report is calculated, giving the market more potential room for short covering rally to grow.

DAIRY HIGHLIGHTS: 

• June Class III futures closed the week at $16.99, down 29 cents from last Friday’s close as it takes over as the running second month.
• For the week, spot cheese fell 6.75 cents to $1.57125/lb, hanging just above the 18-month low posted last week. Spot whey fell 2.50 cents.
• The June Class IV contract was up 22 cents on the week to $18.35, posting its third higher weekly close in a row.
• Spot butter pushed to a 5-month high this week, garnering 9.25 cents in gains overall. Spot powder closed 2.25 cents higher at $1.1975/lb.
• Today’s March Dairy Products Production report showed cheese output 0.2% below March 2022 levels, while butter production was up 1.4% YoY.

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Author

John Heinberg