CORN HIGHLIGHT

• The corn market saw additional technical selling as prices pushed through levels of support, triggering long liquidation and momentum selling, boosted by strong selling pressure across the grain complex. July futures traded to their lowest close since December 2021, and December corn closed under the key psychological $5.00 level.
• A cancellation of 272,000 MT (10.7 mb) old crop corn by China only added to the selling pressure and fueled additional demand concerns. The corn market is anticipating further old crop demand adjustments, adding to a growing carry out picture.
• Brazilian second crop corn is still developing without any major overall issues. The forecasted record corn production allows for cheaper export offerings which will make it difficult for the US exporters to compete on the global market.
• The overall weather forecast stays supportive for the majority of the Corn Belt with above average temperatures and with rainfall average to below, which should keep the planting window over the next couple weeks very favorable.
• The USDA will release weekly export sales totals for last week on Thursday morning, and expectations are for -500,000 MT to 300,000 MT of old crop sales. If even at the top end of expectations, the U.S. corn export program is struggling to reach USDA export projections for the marketing year.

SOYBEAN HIGHLIGHTS:

• Soybeans traded sharply lower again today with front month July leading the way lower as both soybean oil and meal The move lower in soybean oil came despite a jump in crude oil. Palm oil was down for the third straight day on rising production and weaker demand.
• November soybeans are at the lowest level since December of 2021, but closed a chart gap left in July of last year which could be a technical level of support.
• The selloff comes as the USDA forecasts a record crop for the US and Brazil, while larger outside influences having to do with the economy and recession, pressure commodities.
• With Brazil’s soybean harvest complete and the bulk of soybeans that could not be stored sold, producers are holding on to their soybeans as an inflation hedge which is driving up premiums in Brazil. This could have a positive effect on US prices.

WHEAT HIGHLIGHTS:

• Wheat plunged to double-digit losses in all three US classes after Turkey announced that a deal had been reached to extend the Black Sea grain corridor for another 60 days.
• The day 1 yield estimate of 29.8 bpa on the HRW wheat crop tour is the worst finding since the tour began in 2003. Normally the yield is closer to 45 bpa. This could explain why KC futures were not down as hard as Chicago and Minneapolis.
• Paris milling wheat futures were also sharply lower due to the extension of the Black Sea agreement. The front month September contract lost 9.00 euros per metric ton.
• Not offering any support to US wheat futures is the US Dollar as it trends higher, breaking the 103 level today.

DAIRY HIGHLIGHTS:

• The spot cheese block/barrel average has recovered 2.50c over the last two sessions, but the milk market keeps closing red.
• Nearby class III futures closed lower down anywhere from 1c to 25c for the day. Selling intensified in the further out contracts.
• Spot butter keeps finding steady support near the $2.50/lb level. Today’s trade brought the price up 2.25c to $2.46/lb.
• Spot whey was offered another penny lower to $0.2875/lb. This is its lowest close since 2019.
• The USDA will release it’s April milk production report on Friday.

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Author

John Heinberg