CORN HIGHLIGHTS:

• Corn futures finished mixed on the session, pressured on the overnight session by rainfall in the northeastern and eastern Corn Belt. Concerns regarding the direction of the Fed regarding interest rates limited both commodity and equity markets overall on the day.
• The weather forecast overall remains spotty as rainfall coverage is expected to be hit-or-miss for the next seven days. Despite some recent, but limited, rainfall in many areas of the Corn Belt are still in need of additional and timely rainfall.
• Demand will stay a focus on Thursday with the USDA releasing weekly export sales. Expectations are for old crop sales to range from –110,000 MT – 550,000 MT and New crop from 0 – 350,000 MT, as U.S. corn export prices struggle against cheaper global competition.
• Weekly ethanol margins remain rangebound with the weekly Ethanol Production report showing production of 18,000 barrels/day and stocks down 722,000 barrels. Overall corn usage for ethanol is still behind the USDA pace needed to reach targets for the marketing year.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day mixed with July lower, but November slightly higher. As for the products, soybean meal closed lower, while soybean oil ended higher despite a decline in crude oil.
• Prospects for rain are improving in the forecast with good, widespread rains expected across the Midwest that should begin to fall Thursday and into the weekend. If significant rains fall over the upcoming three-day weekend, prices might face some selling pressure.
• Today, the Federal Reserve announced that they would not be raising interest rates this month, but that they would likely implement two more “small hikes” before the year is over. This noticeably weighed on the stock market as the trade was expecting either no more hikes this year or one more, and the comment likely weighed on commodities as well.
• The EPA was supposed to make their decision about biofuel mandates today, which had given the soy complex support yesterday, but the decision was delayed until June 21. The decision could provide support for soybeans and the expansion of biodiesel.

WHEAT HIGHLIGHTS:

• Rain in the Plains states may slow harvest short term. In any case, this year’s winter wheat harvest could be close to the smallest in 50 years because of the drought experienced in the southwestern Plains this growing season.
• Western Canada has been too dry in spring wheat areas, but there are chances for rain over the coming week in Alberta and Saskatchewan, and the front could potentially make it into Manitoba as well. This moisture would be welcomed for the spring wheat crop.
• Both Brazil and Argentina are experiencing potential frost and freezing conditions. While there is not much concern about Brazil’s safrinha corn at this time, the low temperatures over the next few days could slow germination and growth of Argentina’s winter wheat crop.
• This afternoon, the Fed announced a pause in interest rate increases. However, they said there might be a couple more hikes later this year. Financial markets did not like this result, and some of that negativity may have spilled over into the commodity complex.
• In general, the grain trade is in a weather market, and the European weather model shows a bit more moisture than it did previously. This offered some weakness to corn and soybeans, which likely weighed on wheat as well.

DAIRY HIGHLIGHTS:

• Class III milk futures finished red across the board on Wednesday as contracts lost as many as 28c. Several contracts hit new lows.
• The spot cheese block market lost 1.50c as a total of 12 loads traded, pushing the price to $1.39/lb. This is its lowest close since May 2020.
• The butter and powder markets caught a bid on Wednesday. Spot butter gained 3.25c and powder added 0.25c. This helped support nearby Class IV.
• Spot whey still remains under pressure, dropping 0.75c to $0.2725 on Wednesday. There were 15 loads traded.

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Author

Bryan Doherty