CORN HIGHLIGHTS:

• Front end corn futures reversed lower from overnight strength as increased producer selling in the US and South America may have limited gains. A slower than anticipated planting pace supported new crop futures as bear spreading was evident across grain markets on Tuesday, with deferred contracts gaining on the nearby.
• The USDA reported crop progress and planting pace on Monday afternoon. US corn planting slowed last week due to wet weather as only 36% of the crop was planted as of Sunday. This was up 9% from last week and below market expectations. The 5-year average was at 39%, and with only 36% of the crop planted, 2024 has become the third slowest planting pace over the last 10 years. Only 2019 and 2022 were slower.
• The planting pace will continue to struggle as another weather system moves across the Corn Belt this week. The forecast is showing a break in the weather in the middle of the month, but expectations are for a warm and wetter forecast into the end of May.
• The USDA will release the next WASDE report on Friday morning. The May report will give the market its first estimates for the 24/25 marketing year and updates for the current marketing year. Old crop corn carryout is expected to decrease slightly, but 24/25 will likely show the potential for large production and increased carryout year over year.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day mixed in bear spreading trade which saw the front months slightly lower but gains in the deferred months. Prices were likely correcting a bit after the recent rally and ahead of the USDA report on Friday. Soybean meal finished the day lower while soybean oil was higher. Since May 1, funds are estimated to have short covered 35,500 contracts of soybeans.
• Yesterday’s Crop Progress report showed that the soybean crop is 25% planted which was below the trade estimate of 28% and compares with 18% last week. Soybean plantings are still above the 5-year average of 21% but could slip if progress is stalled again this week. 9% of the crop has emerged.
• Early trade estimates for Friday’s USDA report have the 23/24 soybean ending stocks relatively unchanged, and the ending stocks for 24/25 are estimated at 439 mb, using a soybean yield of 52.0 bpa. The Argentinian bean crop is expected to be revised lower to 49.7 mmt from 50 mmt, and Brazil’s production is expected to be lowered to 152.5 mmt from 155 mmt last month.
• The flooding in Rio Grande do Sul has had a large impact on this rally and has now been declared a state of emergency. The flooding has specifically benefitted soybean meal as Brazil typically exports a portion of its bean crop to Argentina to be crushed. The flooding comes after a season that suffered through drought conditions as well further impacting yields in those areas.

WHEAT HIGHLIGHTS:

• After a few strong sessions, wheat, along with the rest of the grain complex, took a breather with lower closes in all three classes. Bear spreading was noted in Chicago and KC wheat, in which nearby contracts were under heavier selling pressure compared to deferred. This could be a result of profit taking after the strong rally, with the recent rains throughout the nation’s midsection. Matif wheat futures closed marginally lower today as well, offering no support to the US market.
• On yesterday afternoon’s Crop Progress report, the USDA said that the winter wheat condition improved 1% to 50% good to excellent. Looking at the breakdown, SRW wheat is rated 74% GTE, while HRW is only 45% GTE. Additionally, spring wheat planting went from 34% complete a week ago to 47% done this week. This is well above last year’s 21% and the 5-year average at 31%.
• The weather forecast for southwest Russia and eastern Ukraine could feature a hard freeze later this week which may provide some support to wheat. Black Sea wheat is still the world’s cheapest, but with Russian export values said to be firming, it could lead to more competitive US exports.
• According to Stats Canada, Canadian wheat stocks at the end of March totaled 11.756 mmt. This was below the expectations for a 12.2 mmt figure, but this is also well below 13.9 mmt last year. Excluding durum wheat, the stocks total 10.1 mmt. This adds to the overall bullish picture for wheat futures.

DAIRY HIGHLIGHTS:

• The nearby Class III futures were red today, ranging from 2 to 17 cent lower in the May through October contracts. The second month chart closed at $19.43.
• Spot cheese was down a quarter cent with both blocks and barrels falling that much today, bringing the average to $1.85875/lb. Whey was unchanged.
• On the Class IV side, May was unchanged while the June through December futures were down 2 to 26 cents with September hit the hardest. Volume was light.
• Tuesday saw butter give back 5.25 cents to close at $3.0225/lb while powder fell 0.75 cents to $1.1150/lb, still hanging near long-term support.

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

John Heinberg