CORN HIGHLIGHTS:

• The corn market saw additional long liquidation and technical selling after yesterday’s poor price action and planting progress numbers pressured the grain markets in general.
• Bullish news continues to fade out of the corn market and price movement is reflecting this lack of news. Going forward, the corn market will need to see either adjustments by the USDA, weather changes or a demand increase to support the market.
• The USDA released planting progress numbers on Tuesday afternoon. US corn producers planted an additional 13% to raise corn planting to 83% complete. This was 1% ahead of the 5-year average as U.S producers have made progress despite overall wet conditions.
• The US corn crop is 58% emerged, in line with the 5-year average. The market will be looking for the first crop ratings on this year’s corn crop, which should be released in early June.
• Argentina is set to start corn exports to China in July after the two countries have worked through quality and export requirements of the cereal grain, according to a Reuter’s article. Argentina will soon begin harvest of this year’s corn crop, expected to be near 47-48 mmt.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower for the second consecutive day after further losses in soybean meal with soybean oil ending the day higher. Yesterday’s crop progress report established that planting is not delayed, and the focus will likely now shift from planting concerns to summer weather.
• Monday’s crop progress report showed soybean plantings at 68% complete, surpassing the trade guess of 67%, up from 52% last week, and ahead of the 5-year average of 63%. The crop is 39% emerged, compared to 26% last week and the 5-year average of 36%. Some of the crop may not have been planted under ideal conditions, likely necessitating some replanting. With wet weather still in the forecast, it will be important to monitor the remaining planting progress closely.
• There has been a general lack of news especially regarding export sales which have been very slow with Brazil and Argentina getting most of the Chinese business. While US Gulf offers have become more competitive with Brazil, this is not the typical export window for the US, and domestic demand will be crucial.
• With export demand slow, it is possible that the USDA will lower its annual export estimate in soybeans by 25 million bushels in its report on June 12. Additionally, the USDA estimated yields at 52 bushels per acre which could end up being too high. If yields are eventually lowered, a smaller carryout could be supportive to futures.

WHEAT HIGHLIGHTS:

• After a two-sided trade, wheat closed lower across all three US futures classes. Bear spreading, where the front months lost to the deferred contracts, was observed in Chicago wheat, and may be due to SRW wheat conditions looking much more favorable than HRW. Additionally, outside markets might have contributed to the weakness in grains, with the US Dollar Index sharply up today and the Dow down over 400 points at the time of writing.
• According to the USDA, as of May 26, winter wheat was rated 48% good to excellent, down 1% from a week ago. Also, 77% of the crop was headed, above both the 5-year average and last year’s 69%. Additionally, 88% of the US spring wheat crop is planted, ahead of the average pace of 81% and last year’s 79%. Emergence of the crop was at 61%, compared to 52% on average and 50% a year ago.
• The forecast for southern Russia shows chances for scattered rains and cloud cover, which should limit hot temperatures. This looks less threatening than the recent trend and may have contributed to today’s weakness. In related news, the Indian government may eliminate the 40% tariff on wheat next month, allowing for Russian imports to rebuild reserves.
• In tandem with the recent IKAR downgrade, SovEcon has also lowered its estimate of Russian wheat production to 82.1 mmt, down from 85.7 mmt. The crop may have experienced more damage than originally anticipated, which is cited as the reason for the reduction.
• According to the Ukrainian Weather Center, Ukraine’s 2024 wheat harvest is expected to be at least 18 mmt, slightly lower than the Ukrainian Grain Association’s estimate of 19.1 mmt. Ukraine has planted 4.36 million hectares of winter wheat for the 2024 harvest, up 3.8% year on year. Additionally, 252,500 hectares of spring wheat were planted, up 7% year over year.

DAIRY HIGHLIGHTS:

• After the large down day yesterday for milk futures, the market was choppy on Wednesday and closed mixed across the board.
• The spot market kept pressure on futures, with butter, cheese, powder, and whey all finishing the session red.
• Spot butter closed back below the $3.00/lb threshold, closing 2.75c lower to $2.9750/lb on 5 loads traded. This follows yesterday’s 12c down day.
• The US spot cheese block/barrel average has closed red seven sessions in a row, as the market falls further below $2.00/lb.
• Outside market pressure stemmed from a higher Dollar and lower feed costs. US corn fell 7c lower.

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Author

Brandon Doherty