CORN HIGHLIGHTS:

• Further technical selling and long liquidation pushed the corn market moderately lower.  December corn failed to find support at the June 8 price gap at $6.33 ½. Confirmation of rainfall in recent forecasts and longer-term weather models holding a wetter and cooler bias pressure the market.
• The selling in December corn futures has been aggressive as prices have lost nearly 16% over the past six trading sessions and has been measured as one of the steepest six-session drops in corn prices during the month of June over the past three decades.
• Export demand remains a concern as the weekly USDA Export Sales report showed new sales of 140,400 MT of old crop and 123,500 MT of new crop. The total sales were at the lower end of analysts’ expectations.
• Weather models remain bearish for prices, as the 8-14 day forecast is looking at trending overall cooler temperature and above average precipitation over the majority of the corn belt.  Rainfall looks to be targeted over Iowa, Illinois and into Indiana, areas that shifted drier on the latest drought monitor maps.
• Drought monitor maps are reflecting the dry conditions, as the estimate is up to 70% of corn acres in the U.S. are experiencing some form of drought, up 10% from last week.
• The market may be poised for some short covering before Friday’s 11:00 am USDA Planted Acreage and Grain Stocks report, as traders could look to square positions. Expectations are for corn acres to be at 91.8 million acres, down slightly from the March planting estimates. Grain stocks for the quarter are expected to be near 4.25 billion bushels, down 2.3% from last year.

SOYBEAN HIGHLIGHTS:

• Soybeans ended significantly higher in the July contract as First Notice Day approaches tomorrow, but deferred contracts only ended slightly higher. Soybean meal closed higher while only July and August soybean oil ended higher.
• The USDA’s Planted Acreage and Stocks report will be released tomorrow, and analysts are expecting soybean acres to increase slightly, while stocks are estimated to decline.
• Significant rains are currently moving through central Illinois, but they are accompanied by strong winds in some areas with reports of up to 70 and 80 mph. More rain is in the forecast for Iowa, Illinois, and Indiana over the next 5 days.
• Weekly export sales were disappointing again with an increase of 8.4 mb for 22/23 and an increase of 0.6 mb for 23/24. Sales were down 28% from the prior 4-year average. Last week’s export shipments of 7.0 mb were below the 11.4 mb needed each week to achieve the USDA’s export estimates.

WHEAT HIGHLIGHTS:

• Despite holding in positive territory for much of the day, Chicago wheat posted small losses at the close. The silver lining may be that the market is probing for a bottom at these lower support levels.
• The USDA reported an increase of 5.7 mb of wheat export sales for 23/24. The USDA is estimating 725 mb of wheat exports for 23/24 and last week’s shipments of 5.8 mb are behind the 14.1 mb pace needed to meet that goal.
• The US Dollar Index is trending higher today and above the 103 level. Along with poor export data, these factors are likely limiting the upside for wheat futures.
• Also offering resistance to US wheat is the fact that Canada revised higher their spring wheat seeding to the largest acreage since 2001. Recent rains in the northern US are likely to improve spring wheat conditions as well. Interestingly, Minneapolis wheat was the only US class to post gains today in the face of these negative factors.
• The US Ag Attaché in Australia is projecting their wheat crop at 29 mmt, down about 10 mmt from last year. The reduction is a result of anticipated drought conditions caused by the El Nino weather pattern.

DAIRY HIGHLIGHTS:

• The US spot whey market was offered a penny lower to $0.2325/lb on Thursday, closing at $0.2325/lb. This is a new all-time low.
• The cheese price still can’t find any relief. Sellers moved another 24 loads onto the market and kept blocks unchanged at $1.33/lb while barrels fell 3.25c to $1.35/lb.
• The block/barrel average cheese close of $1.34/lb is a new low for the year. As long as sellers keep pushing inventory onto the market at these low prices, milk futures will remain under duress.
• Nearby class III futures were down another double digits on Thursday. For the week, August milk is down $1.37 per hundredweight.

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Author

Brandon Doherty