The CME and Total Farm Marketing offices will be closed
Monday, May 29, 2023, in observance of Memorial Day
- July corn was the strong leg of the corn market as a firm cash market tone and end user buying supports the old crop prices, but weak demand tone pressured the corn market overall.
- USDA weekly export sales were disappointing again this week For the week of May 12-18, old crop sales saw net reductions of 75,200 MT, and new crop sales of 52,100 MT, both were at the lower end of expectations. This was the third week out of the last four that old crop sales were negative on the week.
- Weather models are showing warmer temperatures and limited rainfall over the core of the Corn Belt into early June, as a high-pressure ridge is developing over this region. Weather forecasts after Memorial Day will be key for potential precipitation to develop around the June 5-6 window.
- June corn options expire on Friday, which could bring some volatility to the market as prices tend to drift to areas on large open interest. The 600 strike price holds the largest amount of open interest going into Friday.
- The trend higher in the Dollar Index continued today, as the dollar traded to its highest levels since early March, which may help limit gains in the grain commodity markets on the session.
- Soybeans traded lower today, with most of the losses in the deferred months and July only closing half a penny lower. Poor soybean export sales and the decline in soybean meal weighed on the bean market. Soybean oil closed higher despite lower crude.
- Soybean meal export sales were a bright spot today coming in at 341,000 tons for 22/23. Poland was the top noted soybean meal buyer last week.
- The weekly export sales report reported increases of 4.2 mb of soybean export sales for 22/23, a low number, but at least there were not any net cancellations. Export shipments were 10.6 mb and were above the 13.0 mb needed each week.
- Palm oil closed 3% higher today, finally showing signs of life as the Malaysian Palm Oil Board raised some concerns about production in the coming year with El Niño potentially becoming a problem in southeast Asia. This should support soybean oil.
- Brazil’s record soybean crop is now estimated near 157 mmt, while Argentina is expecting just 21 mmt, significantly less than the USDA’s estimate of 27 mmt. Rains are also now slowing down harvest in Argentina.
- The USDA reported a net cancellation of 1.7 mb of wheat export sales for 22/23, but an increase of 9.0 mb for 23/24.
- The wheat complex had an overall mixed close with Chicago contracts lower, with gains in K.C. and Minneapolis futures. Even though rains are popping up over the western Plains, and the SRW areas are mostly dry.
- Some of today’s weakness may have stemmed from rains beginning to fall in Argentina. While it is too late to help corn and beans, it may improve soil moisture for their wheat planting.
- Russian wheat export FOB offers are now said to be as low as $240 per ton, as they continue to dominate the export front.
- It has been confirmed that EU wheat has been imported from Germany and Poland into the southeastern US, contributing to weakness of futures.
- There are potential demand concerns down the road, with reports that China’s economy is slowing, China has a rise in covid cases, and as of this writing, there has been no resolution to the US debt ceiling issue. This has also sent energy and financial markets lower, acting as an anchor on the grain complex.
- Spot cheese fell 3.6250 cents to close at $1.51/lb, nearly erasing Monday and Tuesday’s gains, to enter Friday up 3/4 of a cent for the week.
- This has dragged nearby milk near its recent lows with the June Class III contract at $16.11, up just 3 cents on the week and 84 cents off yesterday’s high.
- Class IV trade saw movement only in its July futures, which dropped 3 cents. The second month June holds a $2.06 premium to its Class III counterpart.
- Spot butter is down 4.25 cents on the week, while powder enters Friday up 1.25 cents for balanced action.
- Yesterday’s Cold Storage showed comfortable supplies remain the case for both cheese and butter.
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.