CORN HIGHLIGHTS:

• After trading both sides of unchanged and making a new low for the move. December corn found support below the market on very oversold conditions and a sharply higher wheat market to close unchanged.
• The USDA released their updated crop ratings for corn Monday afternoon, raising the Good/Excellent rating 1%, to 51%. While the overall rating came in as expected, Illinois’ G/E rating improved 10% to 36%.
• Although the current crop conditions have improved, they continue to be the lowest since 2012, with some feeling that current conditions imply a yield closer to 171.5 bpa. This would suggest a crop size of 14.75 billion bushels based on the updated USDA acreage numbers and imply a 300 mil. bu increase to carryout based on current USDA usage.
• Corn used in ethanol production for the month of May was weak and only came in at 437.5 mil. bu, bringing this year’s total used to 3.835 bil bu, which is down 4% from the USDA’s current estimate of down 4%. At this point in the marketing year, it seems unlikely that usage will reach USDA estimates without any adjustments lower.

SOYBEAN HIGHLIGHTS:

• Soybeans ended mixed today with the July contract fading lower as its in the delivery process. While November closed slightly higher as trade seems to be focusing less on the recent acreage report and more on upcoming weather which should be wet over the next 7 days.
• Crop progress was released late on Monday and showed soybean conditions declining surprisingly, despite the very beneficial rains that fell over the Corn Belt last week. Soybeans are now at 50% good to excellent and 29% poor to very poor. 24% of the crop is blooming and 4% is setting pods, both below average.
• News today was relatively quiet, and the market is trying to find direction. After Friday’s Stocks and Acreage reports and Monday’s Crop Progress report, there is a lot of data for traders to digest. The next USDA supply and demand report on July 12 may help the market to find direction.
• Palm oil reserves in Malaysia may rise to a four-month high. June inventory grew 11% from the previous month to 1.86 million tons. Down the road, El Nino could have an impact on palm oil production, however.

WHEAT HIGHLIGHTS:

• Wheat posted strong gains today, seemingly on concern about the situation in the Black Sea. Explosives have reportedly been planted at the Zaporizhzhia nuclear power plant in Ukraine. Both Russia and Ukraine are blaming each other, and naturally this is causing an increase in tensions and concern for the welfare of the region.
• Aside from the nuclear plant, there is also question as to whether the Black Sea export corridor will be renewed on July 18^th. There continues to be talk out of Russia that they will not renew the agreement, but traders have heard that story before.
• Monday’s crop progress report showed spring wheat condition down 2% from last week, now at 48% good to excellent. This also was supportive to the wheat market today. As for winter wheat, condition was left unchanged at 40% G/E, but harvest pace is still well behind at only 37% complete versus 46% on average.
• Argentina is planting wheat, with the Argentina Secretariat of Agriculture saying that 23/24 will have 6.1 million hectares planted. For the 23/24 marketing year, Argentina wheat production may increase to 18 – 19 mmt versus 12.6 mmt in 22/23.

DAIRY HIGHLIGHTS:

• Class III and IV milk futures were under duress once again on Wednesday with nearby contracts down anywhere from 4c to 34c.
• July Class III closed 14c lower to $14.01. This is currently $3.97 below the front month Class IV price of $17.98.
• The US cheese spot trade was offered 2c lower on another 15 loads of inventory traded. Blocks fell 4c and barrels jumped 2c.
• Spot butter and powder were both lower, falling 0.25c and 0.75c respectively.
• Further out, Class IV contracts received some selling pressure. November fell 43c, December was down 34c, and January lost 25c.

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Author

Brandon Doherty