CORN HIGHLIGHTS:

• Corn prices finished mixed on the day as prices faded off early session strength supported by a further reduction in crop ratings.
• Spread activity in the later part of the session pressured prices as traders moved long positions out of the July contract. The spread between July and September corn futures has dropped 20 cents from 85 cents to 65 cents in the past four trading sessions.
• Weekly Crop ratings slipped again on the USDA Crop Progress report, dropping an additional 3% to 61% good/excellent. Analysts were expecting 62% good/excellent as dry conditions still pressure the crop.
• Brazilian corn harvest is starting to pick up, and the push of cheaper, fresh corn supplies hitting the market may limit the front end of the corn market as U.S. prices are well above global competition for export demand.
• The weather forecast overall remains spotty as rainfall coverage is expected to be hit-or-miss for the next seven days.

SOYBEAN HIGHLIGHTS:

• Soybeans closed significantly higher today thanks to gains in soybean oil, crop progress that showed conditions declining, and an EPA decision that will be announced tomorrow about biofuel mandates that could be bullish for the soy complex.
• Planting progress showed that the soy crop is 96% planted (which is above 86% on average) and 86% emerged vs 70% on average. The good to excellent rating fell by 3 points to 59% due to dry conditions, and the poor to very poor rating rose to 9%.
• The Environmental Protection Agency has a June 14 deadline for announcing final renewable volume obligations that will impact the profitability of renewable diesel. The outcome of this decision could be very supportive to the soy complex.
• Soybean oil was supported by a jump in crude oil and an increase in palm oil which gained 2.5% today. Soybean oil has become overbought, but it has followed palm oil very closely and will likely continue to do so.

WHEAT HIGHLIGHTS:

• Despite earlier strength, wheat posted gains of just a couple cents in the Chicago contract, while Kansas City and Minneapolis contracts were mostly lower. This is likely because wheat acted as a follower today, and as the gains in corn faded, so did wheat.
• According to the USDA, 38% of the winter wheat crop is rated good to excellent vs 36% last week. Also, 8% of the crop is harvested vs 9% average.
• The USDA also said that 97% of the spring wheat crop is planted which is in line with average. Only 60% of that crop is rated good to excellent, compared with 64% last week.
• Russian export values continue to fall, with reports that they are talking about lowering the floor to $230 per metric ton. This is below current offers of $235-$240 and is well below the $275 floor that was encouraged a couple months ago.
• The developing El Nino weather pattern is expected to cause drought in Australia, lowering their wheat production.
• Despite a large wheat crop in India which is expected to be 113.5 mmt, tight stocks may mean that they don’t export much wheat this year, if any at all. This could contribute to tighter global availability.

DAIRY HIGHLIGHTS:

• The US spot butter price lost 8.25c last week, which marked its largest down week since the week of January 17th. On Tuesday, the market fell another penny to $2.3525/lb.
• The drop in butter is starting to pressure Class IV milk futures a bit. The July and August ’23 Class IV contracts have recently traded below the $18.00 handle.
• Spot cheese was more of the same on Tuesday. The block/barrel average lost 1.875c and closed at $1.4775/lb. There were a whopping 16 loads of blocks traded during the session.
• Class III milk futures were down as much as 21c on pressure from the cheese market.

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Author

Amanda Brill