- After two-sided trade for the early part of the session, corn futures turned higher led by the July contract and supported by poorer than expected crop ratings, a drier afternoon weather model, and an escalation in the Russia-Ukraine war.
- The USDA released weekly crop ratings on Monday afternoon, and the U.S. corn crop was rated 64% Good/Excellent This rating was down 5% from last week and below market expectations, as the crop conditions are reflecting the current dry weather across the Corn Belt. Most noticeable was the impact in the eastern Corn Belt with Michigan down 20%, Illinois down 19%, Ohio down 17%, and Indiana down 10% from last week.
- Afternoon weather models are still looking to a more active pattern the second week of June, but models trended slightly drier than the overnight models, helping turn corn price higher into the end of the session.
- The corn market will likely stay volatile and choppy this week, focusing on daily weather forecasts and preparing for the June WASDE report to be released on Friday, June 9. The June WASDE is expected to show a weaker demand tone and overall increasing corn supplies.
- Yesterday’s Crop Progress report showed soybeans are 91% planted vs 83% last week, and 76% average. Additionally, 62% of the crop was rated good to excellent (the lowest since 2014).
- Soybeans traded both sides of neutral in today’s session, as weather remains an uncertainty. Many areas of the Midwest have seen scattered rains, but no widespread coverage just yet.
- Private exporters reported sales of 165,000 mt of soybeans for delivery to Spain during the 22/23 marketing year.
- Higher soybean oil today lent some support, despite lower palm and crude oil. Crude oil has set back on doubt that OPEC will stick with their lower production targets, and palm oil was lower after news that Malaysia could see an uptick in output of 4.7%.
- Yesterday’s Crop Progress report showed winter wheat was 4% harvested, which is in line with the average. In addition, 36% of that crop was rated good to excellent vs 34% last week. Finally, spring wheat was said to be 93% planted (in line with average), and 64% of that crop was rated good to excellent.
- Wheat was up sharply overnight and early this morning after news that Russia destroyed a key hydroelectric dam in Ukraine. The explosion and destruction occurred at the Nova Kakhovka Dam on the Dnipro River in southern Ukraine. This region produces approximately 6% of Ukrainian wheat.
- The Australian agriculture department is projecting a decline wheat production of 30% due to the El Nino weather pattern. This provided some support to wheat early in the session.
- On Friday’s WASDE report, the market will receive updated estimates of US wheat production, but the export estimate of 775 mb may have to be lowered due to the current slower export pace.
- July and August Class III futures closed 30+ cents higher today as the block/barrel average popped back over $1.50/lb.
- GDT cheese was 7.4% higher to the equivalent of $2.12/lb, leaving a nice premium vs. domestic spot cheese.
- The GDT Index overall was down 0.9%, sitting just above the April lows and near the late 2020 bottom for the index.
- The Class IV market saw milk unchanged with spot butter down 6.75 cents through Monday and Tuesday.
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