CORN HIGHLIGHTS:

• Despite strong wheat and soybean markets to start the week, corn futures only posted slight gains as the market is trying to balance out the forecasted heavy supply picture, planting progress, and the overall demand for corn.
• Managed funds drastically reduced their net short position in the corn market last week.  On last week’s Commitment of Traders report, funds reduced their total net short positions by 115,527 contracts to 102,513 contracts.  In total, managed money has removed nearly 240,000 contracts since the February price low.
• USDA will release weekly planting progress this afternoon.  Expectations are for corn planting to reach 49% complete, up 13% from last week.  The planting pace could be limited toward that target with wet weather over the corn belt in the past week, but the pace likely improved going into the weekend in some areas.
• Weekly Export inspections for corn were within market expectations.  Last week, US exporters shipped 36.9 mb (938,000 mt) of corn. Total exports have reached 1.336 billion bushels, up 30% from last year.  The USDA has forecasted a 29% increase year over year.
• The grain markets will be focused on weather for the next couple of weeks.  Forecasts look mixed across the corn belt as some producers have struggled to stay on pace with planting this spring’s crop.

SOYBEAN HIGHLIGHTS:

• Soybeans closed higher for the day despite initially trading lower overnight. However, they also settled 9 cents below their midday highs. Soybean meal closed significantly lower while soybean oil ended higher by 1.60%. Both July and November soybeans closed above the 100-day moving average.
• Friday’s WASDE report was relatively neutral for soybeans, but they got a boost from sharply higher soybean oil and friendly numbers for corn and wheat. Once again, the USDA was very conservative with adjusting Brazilian production and only lowered it by 1 mmt. CONAB maintains a much lower estimate that will be updated tomorrow.
• Planting faced challenges again last week with rain across most of the Midwest, but some work was able to get done over the weekend. The USDA will release its crop progress report later today, and analysts expect that 38% will have been planted as of Sunday which compares to 25% last week and 49% last year.
• Today’s export inspections report showed an increase of 14.9 mb of soybeans which puts total inspections at 1.453 billion bushels which is down 18% from the previous year.
• Friday’s CFTC report showed funds covering a huge portion of their short position buying back 107,783 contracts, leaving them net short just 41,453 contracts. That short covering resulted in a rally of about a dollar.

WHEAT HIGHLIGHTS:

• Wheat closed sharply higher today in all three categories. With the US Dollar Index down and front month September Matif wheat futures reaching the highest level since late July of last year, funds are believed to be continuing to buy back their short positions in the wheat complex.
• Weekly wheat export inspections at 13.5 mb bring the total 23/24 inspections to 649 mb, which is down 6% from a year ago.  The USDA is now estimating 23/24 exports at 720 mb, up 10 mb from the previous estimate, but still down 5% compared to last year.
• New threats of freeze damage in Russia over the weekend may have caused some additional fund short covering today, with SovEcon reducing their estimate of Russian wheat production by 3.5 mmt to 89.6 mmt. Dryness in the Black Sea area remains a concern as well.
• India’s wheat stocks are said to have hit a 16-year low; their government has made record sales from its reserves in an effort to lower food prices and inflation. This could mean that India will be a net importer of wheat, which would add bullishness to the market.
• In the southern hemisphere, weather concerns are arising that could impact wheat. Cold conditions in Argentina have led to frost, potentially affecting recently planted winter wheat. Meanwhile, in Australia, most areas remain too dry. Although New South Wales received some rainfall over the weekend, conditions outside of this region haven’t been favorable for winter wheat. Farmers in these areas are anticipating improved soil moisture as the transition to La Niña unfolds in the coming months.

DAIRY HIGHLIGHTS:

• Class III June futures closed limit up on the day to close at $21.26/cwt. This marks the second time this contract has gone limit up in less than a week.
• Spot cheese pushed higher led by barrels which were up 6 cents while blocks went unchanged. Spot cheese is now at its highest level since March of 2023 at $1.97625/lb.
• Class IV prices followed Class III higher with most contracts trading 6-28 cents higher on the day. August futures saw the most gains trading 28 cents higher at $21.50/cwt.
• Spot butter improved 3.75 cents higher to close back above $3.00/lb at $3.0275/lb. Powder also improved 1.50 cents to $1.1675/lb, helping support the Class IV market.

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Author

Amanda Brill