CORN HIGHLIGHTS:

• Corn futures finished lower on Friday as a confirmed growing supply picture and potential weather pattern shifts limited buying support. July corn futures closed the week 4-3/4 cents lower and December lost 10-3/4 cents.
• The USDA June WASDE report lowered old crop corn export demand by 50 MB but decreased corn imports by 15 MB to add a difference of 35 MB to projected carryout. Old crop carryout is now at 1.452 BB and New crop was raised to 2.257 BB. The report was close to analysts’ expectations, but still confirmed a weaker demand tone and larger supply picture.
• The USDA raised their projection for Brazilian corn production to 132 MMT (approx. 5.118 BB) by adding 2 MMT (79MB) over last month’s projections, this was larger than analyst expectations.
• Now with the report behind the market, traders will shift focus back to the weather. Models are showing a potential change overall to a cooler and wetter pattern, but the market will be watching precipitation totals and locations over the weekend.
• Corn future weakness may have been limited late today by buying strength in the soybean markets, and the Chicago wheat market trading off the lows of the session.

SOYBEAN HIGHLIGHTS:

• Soybeans ended significantly higher on the day despite a neutral WASDE report. Soybean meal closed lower in the front months, while soybean oil closed higher as palm oil begins to recover.
• Today’s WASDE report held essentially no surprises. The USDA lowered Argentinian production to 25 mmt from their previous estimate of 27 mmt, but that is likely still too high. Brazilian production was increased by 1 mmt to 156 mmt. In the US, soybean ending stocks were increased to 350 mb which was higher than the average trade guess.
• Private exporters reported to the USDA export sales of 197,000 mt of soybeans for delivery to unknown destinations for the 22/23 marketing year. The marketing year for soybeans began on September 1.
• Now that the WASDE is out of the way with very little reaction, traders will turn their focus back to weather. Forecasts for the Corn Belt this weekend and into the next week call for rain, but it may only be around 1 inch. If rains don’t fall this weekend, prices could easily move higher.

WHEAT HIGHLIGHTS:

• All eyes were on today’s USDA report which was overall neutral. Despite this, Chicago wheat posted small gains at the close alongside Paris milling wheat futures. Kansas City and Minneapolis contracts were lower, however.
• The US 23/24 all wheat production was raised slightly from 1.659 bb in May, to 1.665 bb on today’s report.
• The US 22/23 wheat carryout was unchanged at 598 mb. However, it was raised slightly for 23/24, from 556 mb in May to 562 mb in June, due to a slight increase in overall production.
• The USDA estimated average US wheat yield at 44.9 bpa, up from 44.7 last month. However, this is lower than the average yield last year of 47.0 bpa.
• Russian wheat production was raised by 3.5 mmt to 85.0 mmt, and Ukraine was raised 1.0 mmt to 17.5 mmt. India and the European Union also saw increases to their overall wheat harvest estimates.

DAIRY HIGHLIGHTS:

• Spot cheese rallied three days in a row to start the week, bringing optimism back into the dairy market. However, cheese sellers used the rally as a selling opportunity and brought the block/barrel average back down over 9c by week’s end.
• The GDT auction from this week saw anhydrous milk fat, butter, butter milk powder, and cheddar all move higher. Cheddar led the way, adding 7.40%.
• Several Class III milk contracts hit new contract lows this week.
• US dairy cow culling for the week ending May 27th, up 14.3% from the same week last year, strong culling rates can likely be attributed to record high cattle prices at the time.

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Author

John Heinberg