CORN HIGHLIGHTS:

• The corn market started the day weak, failing to build on yesterday’s rally due to anticipation of a bearish USDA report. However, it surged after the USDA announced surprise decreases in both old crop and new crop ending stocks. Despite this, weak trade in the wheat complex and neighboring soybeans limited corn gains.
• The USDA surprised the market by dropping old crop ending stocks for the 23/24 crop year to 1.877 billion bushels from June’s estimate of 2.022 bb, where a slight increase was anticipated, by raising export demand much more than expected, along with increased feed and residual use.
• 24/25 ending stocks came in at 2.097 bb from June’s 2.102 bb where an increase to 2.312 was expected. The decrease was largely due to the lower 23/24 ending stocks which become the 24/25 marketing year’s beginning stocks number. Production for 24/25 was as expected with no change to yield with the additional acres from the June 28 Acreage report.
• For South America, the USDA made only a minor adjustment to Argentina’s corn production estimate by dropping it to 1 mmt from last month’s estimate to 52 mmt. For Brazil, the USDA kept its projection unchanged at 122 mmt from last month, and above Conab’s latest 115.86 mmt estimate.
• In yesterday’s trade, it was estimated that funds bought about 2,000 contracts in the corn market, which brought their total estimated net short position to 364,000 contracts, a record if verified. Later today, the CFTC will release its Commitment of Traders report showing the fund’s net position in the markets as of Tuesday, June 9. Given the size of the fund’s net short position and today’s bullish report, it is possible that we could see a corrective bounce and some short covering in the market.
• Basis continues to be firm in the spot market as exporters and processors reach for supplies with slow farmer selling. This may change as farmers begin to move current supplies into the market as they make room for the upcoming harvest.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower after today’s mostly neutral WASDE report. Prices made new lows for the year as trade expects a large soybean crop with continued good weather in the forecast at this point. Poor export sales have also been a negative factor in soybeans and the entire grain complex. Both soybean meal and oil ended the day lower as well.
• For the week, August soybeans lost 61 ¼ cents to 1105 and November soybeans lost 64 ½ cents to 1065 ¼. August soybean meal lost $18.40 to $338.80, and August soybean oil lost 2.90 cents to 46.65 cents. With weather and crop conditions seemingly good so far and export sales slow, funds have not had encouragement to begin buying back their large net short position.
• Today’s WASDE report was friendly to corn but very neutral for soybeans. US production for 24/25 was lowered very slightly from last month’s estimate to 4.435 billion bushels and was a hair short of the trade guess. Yields were unchanged at 52.0 bpa and new crop ending stocks pegged at 435 mb were just below trade expectations.
• The USDA did not adjust Brazilian soybean production in today’s report and left it at 153 mmt which is well above CONAB’s estimate from earlier this week at 147.34 mmt. It is unusual to have such a large discrepancy in production when the crop is virtually completely harvested, so those numbers will need to converge eventually. The USDA did lower its estimate of Argentina’s soybean crop slightly to 49.5 mmt, from last month’s 50 mmt.

WHEAT HIGHLIGHTS:

• Wheat closed sharply lower in all three categories as a result of relatively bearish data in today’s WASDE report. Additionally, Matif wheat futures also closed lower, offering no support, despite a French wheat crop that is in much poorer shape compared to a year ago.
• On today’s report, the US wheat numbers were unfriendly to the market; the USDA increased their estimate of all wheat production from 1.875 bb in June to 2.008 bb currently. That is the highest in eight years and paints a bearish picture for the wheat market. As far as the breakdown goes, winter wheat production came in at 1.34 bb, up 7% from last year, while spring wheat production was estimated at 578 mb, up 14% from a year ago. Global wheat production also went up to 796.19 mmt versus 790.75 last month.
• Both the US and world carryout numbers also added pressure to the wheat market. US old crop carryout increased from 688 mb to 702 mb, while the 24/25 ending stocks went from 758 mb to 856 mb. Globally, 23/24 wheat carryout increased from 259.6 mmt to 261.0 mmt, and the 24/25 season went from 252.3 mmt on the June report to 257.2 mmt today.
• Aside from today’s data, there were also rumors overnight that Russia’s President Putin will not rule out a revival of the Black Sea Grain Initiative. This talk may have added to the weakness in wheat because, in theory, this would allow Ukraine to export more grain.
• According to the Rosario Board of Trade, Argentina’s wheat production forecast has been cut to 20.5 mmt, a 2.4% decline from the previous projection of 21 mmt. Argentine farmers are currently planting the 24/25 crop, but dry conditions in June have affected the planting process, leading to the reduced forecast. Additionally, the estimated planted area has decreased from 6.9 million hectares last month to 6.7 million hectares.
• The wheat crop in western Australia is expected to see a 20% year over year increase to 9.2 mmt. July rains have brought relief to drier crop areas, and yields are anticipated to improve. However, weather and growing conditions will likely need to remain favorable through the rest of the season in order to achieve this production estimate.

DAIRY HIGHLIGHTS:

• Spot cheese lost 5.25 cents on the day led by blocks which were down 6.50 cents while barrels were down 4 cents. This makes for a weekly loss of 3.1250 cents for the block/barrel average which closed at $1.87/lb today.
• Class III followed the cheese trade lower with all 2024 contracts trading 5-29 cents lower. The 2024 Class III average lost 8 cents to close at $18.39/cwt.
• Spot butter was unchanged at $3.10/lb but posted a weekly loss of 3.25 cents. Powder was unchanged today and over the week at $1.18/lb.
• Class IV was relatively uneventful with no trading volume. The 2024 Class IV average lost a penny today to close out the week at $20.80/cwt.

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Author

Amanda Brill