CORN HIGHLIGHTS:

• Corn futures saw heavy selling Wednesday as weakness in energy markets and a loss of technical momentum triggered long liquidation. July corn fell 9½ cents to 465¾, while December dropped 8½ cents to 489¼.
• Rumors of a potential U.S.–Iran agreement pressured crude oil prices, sending crude back below $100/barrel and nearly 6% lower on the session. The sharp decline spilled over into the broader commodity sector, adding pressure to grain markets.
• Weekly Ethanol production jumped to 327 million gallons for the week ending May 15. This was up 9 million gallons over last week and 7% Year-over-year. Corn used for ethanol production was estimated at 109 mb for the week, which is slightly behind the pace needed to reach USDA targets for the 2025-26 marketing year.
• Attention turns to Thursday’s USDA Weekly Export Sales report, with traders expecting 2025–26 sales between 800,000–1.6 MMT and 2026–27 sales of 150,000–300,000 MT. Last week’s total of 684,000 MT disappointed expectations.
• Export demand may remain challenged as Argentina harvests a record corn crop and Brazil’s harvest approaches. Increased South American supplies could create additional competition for U.S. exports in the months ahead.
• Terms and details of the $17 billion in potential US ag purchases by China remain vague. Currently China has a 15% tariff on US corn imports, and that tariff will likely need to be reduced to trigger sales by private firms in China.

SOYBEAN HIGHLIGHTS:

• Soybeans closed lower Wednesday as traders questioned how much U.S. demand could emerge from China this season. July soybeans fell 9¾ cents to 1199¾, while November dropped 9½ cents to 1193½. Soybean oil led product weakness, falling 0.78 cents as crude oil dropped $6.25/barrel.
• The U.S. and China agreed to reduce tariffs on agricultural products as part of a broader trade agreement, but uncertainty around the details may have encouraged funds to take profits on large long positions. China pledged to purchase $17 billion in U.S. agricultural products, though it remains unclear which commodities will benefit.
• Brazil’s soybean production is projected to reach 215 mmt within five years as acreage expansion and improving yields continue driving growth. Rising domestic biofuel demand is expected to support annual production growth of roughly 3% through 2031.
• Chinese imports of U.S. soybeans more than doubled in April from a year ago as previously purchased cargoes continued arriving. However, recent discussions between the U.S. and China did not expand beyond the existing commitment for 25 mmt of soybean purchases, leaving future demand questions unresolved.

WHEAT HIGHLIGHTS:

• Wheat rejected early strength, to close in the red across each class. Pressure was put on the grain complex by fading energy prices after reports of three oil supertankers passing through the Strait of Hormuz, bound for China and South Korea. The market also likely saw additional profit taking and speculative selling today. In the July contract, Chicago close 6-3/4 cents lower at 660-1/2, Kansas City fell 5 cents to 698-3/4, and MIAX dropped 2 cents to 694-1/2.
• Algeria is reported to have purchased 200,000 mt of milling wheat, far exceeding the initial tender for 50,000 mt. Shipment is said to be for the July-August timeframe, and prices ranged between $285-$292/mt on a CNF basis.
• China agreed to reduce tariffs on agricultural products as part of a trade deal, but wheat appears less likely to benefit than corn or soybeans. U.S. wheat remains uncompetitive on the world market, leaving uncertainty around how much demand may materialize from the agreement.
• In the Canadian Prairies, temperatures have been warmer than normal over the past week. That trend looks to continue over the next 15 days or so, with conditions also turning drier. This pattern should be favorable for spring wheat planting, however, rain will be needed later for establishment of the crop.

DAIRY HIGHLIGHTS:

• Spot cheese rebounded some today, up 1.8750 cents to close at $1.54250/lb. Spot whey dropped 0.75 cents to close at $0.6825/lb.
• Class III milk ended lower with the exception of the June contract which gained 8 cents to close at $16.72.
• Spot butter continued lower today loosing 5 cents to close down at $1.5500/lb. Spot powder dropped 4.5 cents to close at $2.21/lb.
• Class IV milk ended lower across the board with June down 24 cents to close at $21.89.

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Author

John Heinberg