CORN HIGHLIGHT

• Early short covering faded during the session as selling pressure from wheat and soybean markets spilled into the corn market during the session. In addition, markets turned softer overall as the US debt ceiling talks stalled between politicians in Washington DC.
• The weak afternoon price action keeps the market on the defensive going into next week, as the sellers appear to still be in control of the market.
• Overall, US weather looks to stay favorable as corn planting is hitting the home stretch. The market will be keeping a close eye on the northern Plains and the slow progress in that region with prevent plant dates starting as early as May 25.
• Demand remains a focus on Old Crop corn prices. Export sales are soft, and the market is concerned that additional China cancellations could occur, with still 2.1 MMT of corn sales on the books that still need to be delivered to China.
• Corn basis levels are reflecting softer tones as producers have slowed field work, allowing for better movement of stored supplies onto the cash market.

SOYBEAN HIGHLIGHTS:

• The soy complex started the day higher this morning but ended lower. July beans led the way down and were pulled lower primarily by soybean meal.
• Early morning support came from a jump in Malaysian palm oil by 2.6% on renewed Chinese demand, but for the week it lost 4.6%. Crude oil began the day higher but slipped as well.
• Bearish outside influences drove the entire grain complex lower following comments by Fed Chairman Powell, and agreements about raising the debt ceiling that were halted a few hours ago after disagreements occurred between Republican negotiators and the White House.
• Last week’s export sales of 623,000 bushels of Old Crop beans weighed on markets again today. To arrive at the USDA’s expectations, an additional 80 mb of soybeans need to be sold by August. Shipments were a marketing year low at 6.9 mb.

WHEAT HIGHLIGHTS:

• The Kansas wheat crop tour estimated an average yield of 30 bpa, compared to a 5-year average of 45 bpa. Additionally, they are projecting the Kansas crop at 178 mb, the worst since 1963.
• Despite the crop tour findings, K.C. wheat lost about 30 cents today in the front month contracts. This may indicate that the poor conditions have already been priced in the market.
• The strengthening El Nino pattern could be cause for concern with drought for Australia’s wheat crop. Russia’s spring wheat areas are also warm and dry.

DAIRY HIGHLIGHTS:

• The spot cheese trade gained over 3 cents today and likely was the catalyst for green on the board in Class III.
• Milk production for April was higher YoY by 0.33% while the dairy herd size and production per cow were in line with last years numbers.
• Cattle and calves on feed were 3% below numbers from May 1st of last year; placements in April totaled 1.75 million which is 4% below last years total.

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Author

Bryan Doherty