CORN HIGHLIGHTS:

• The prospects of improved demand, and strength in the soybean market, supported corn futures on Wednesday. July futures lead the market higher as bull spreading, buying front month contracts versus deferred futures, was noted on the session.
• US corn has become very competitive on the global export market. Rumors that European countries are looking at buying US corn helped support the July contract. This talk follows yesterday’s announced sale of corn to Spain.
• The USDA will release the weekly export sale report on Thursday morning. Expectations are for new sales to range from 500,000 – 1.2 mmt for old crop and 250,000 – 500,000 mt for new crop. Last week’s report saw sales of 742,000 mt as corn sales have slowed in recent weeks.
• Ethanol production increased by 1.9% week over week to 1.019 million barrels/day on the Weekly Ethanol Production Report. Total corn used for the week is estimated at 101.14 million bushels, below the needed 109.30 million bushels/week average to meet the USDA’s marketing year forecast of 5.450 billion bushels.
• Weather forecasts and planting pace will still be a focus for the market. A window is open in the eastern Corn Belt, which could provide some opportunity for planting to continue. Overall, long range forecasts are showing a below normal precipitation forecast going into early June.

SOYBEAN HIGHLIGHTS:

• Soybeans finished the day higher with the majority of gains in the front months, with both the July and November contracts up on the week so far. Soybean meal drove soybeans higher today with July closing up 1.58%, while soybean oil settled mixed with gains in the front months but losses in deferred contracts. Excessive rains continue to be supportive to the grain complex.
• Yesterday morning, Reuters reported that China had purchased at least two cargoes of US soybeans for July shipment which is encouraging following the tariffs that were recently announced on Chinese goods and that caused fears of trade retaliation.
• While Brazilian soybean offers remain cheaper, the US has become much more competitive recently with the spread between Brazilian FOB beans and US Gulf FOB offers narrowing by over $1.90 since January. In addition to yesterday’s report of China buying 2 cargoes of US soybeans, more rumors are circling of China potentially buying as many as 8 cargoes for July/August.
• Although the planting pace for soybeans is above the 5-year average, there are still a large number of acres yet to be planted, and wet weather may push planting into June potentially at the expense of better yields. Forecasts are expected to dry out next month.

WHEAT HIGHLIGHTS:

• Wheat finished the session with modest losses in all three categories. Despite Matif wheat gapping higher and closing higher, it closed well off the daily highs, and weighed on US wheat. Furthermore, the US Dollar Index has been steadily rising over the past several sessions, offering upside resistance to the wheat market.
• The Illinois annual wheat tour found a day 1 average yield of 104 bpa, which exceeded last year’s average of 97.1 bpa. For reference, the USDA is projecting a 2024 yield of 83 bpa in Illinois, which would be down from last year’s record 87 bpa.
• Weather in North America may impact crops this week, according to LSEG Commodities Research. Cold temperatures with the threat of frost may cause wheat planting delays in Canada. Additionally, potentially heavy rain and damaging storms could affect the US winter wheat crop, while also causing delayed planting of corn and soybeans.
• The Black Sea area does look mostly dry for the next couple of weeks. Temperatures have turned warmer, eliminating the recent frost issues, and the second week of the forecast has temperatures turning warmer still. The combined damage from freezing conditions and the dry weather has some analysts projecting a Russian wheat crop below 80 mmt.
• Since the marketing year began on July 1, European Union exports of soft wheat have reached 26.3 mmt as of May 3, representing an 8% year over year decline from 28.6 mmt. North African nations were the top export destinations, led by Morocco and followed by Nigeria and Algeria.
• China has reportedly announced a national insurance program for wheat (along with rice and corn). This is said to be an effort to improve food security by encouraging the planting of these staples. This plan will cover income losses due to pests, diseases, and natural disasters, among other risks.

DAIRY HIGHLIGHTS:

• Trading on expanded limits today, June Class III milk futures gapped 43c lower in the overnight trade after finishing Tuesday locked limit down.
• The market remained under pressure all morning and after the cheese trade as the block/barrel average closed lower for the third day in a row.
• June milk settled the day at $19.95, down 53c and below the $20.00 threshold.
• The market remains on edge following a slightly bearish milk production report compared to expectations, as the USDA said production in April was down just 0.40%.
• It was reported this afternoon that there is a second human case of bird flu linked to dairy cows found in Michigan.
• On another wild day for Class III milk, the Class IV market was as steady as ever with June ’24 down 1c to $21.33 while August ’24 added 9c to $22.02

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Author

Amanda Brill