The CME and Total Farm Marketing Offices Will Be Closed Monday, May 27, in Observance of Memorial Day

CORN HIGHLIGHTS:

• Corn futures held on to gains on Thursday. The prospects of improved demand and stability in the wheat market helped support corn futures. For the second consecutive session, 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. This price competitiveness has the market looking at the prospects of importers looking to buy US corn. The US should stay very competitive in global corn exports into July before global competition will likely increase.
• The USDA released weekly export sales on Thursday morning for May 10-16.  USDA reported new sales of 911,200 MT for old crop and 305,000 MT for new crop. This total was within analysts’ expectations.
• Weather forecasts and planting pace will still be a focus for the market. Recent rainfall in the western Corn Belt has limited progress this week, and another system is forecasted to move through going into the weekend. Longer range forecasts are looking at a dry period going into early June before the pattern turns wetter again. With this forecast, finishing the last portion of corn planting may be difficult as insurance dates are right around the corner.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower after reversing from highs earlier this morning following a disappointing export sales report. The majority of losses were in the front months while deferred contracts were only down by 2 cents. Soybean meal was down in the front months but higher in deferred months, while soybean oil was lower across the board.
• Today’s export sales report showed the USDA reporting an increase of 10.3 million bushels of soybean export sales for 23/24 and an increase of 2.4 mb for 24/25. This was up 5% from the previous week but down 15% from the prior 4-week average. Export shipments of 9.5 mb were below the 12.4 needed each week to achieve the USDA’s export estimate. This was a marketing year low and was down 42% from the previous week. Primary destinations were to Mexico, Japan, and Indonesia.
• Another source of support is that US soybeans are now competitive compared to Brazil and Argentina for Chinese purchases as Brazilian basis levels move higher. China has purchased two cargoes of US soybeans, and it is rumored that they may have purchased more.
• Weather forecasts remain wet through the end of the week which should keep planting progress slow but should dry out at some point next week. Planting pace for soybeans is above the 5-year average, there are still a large number of acres yet to be planted.

WHEAT HIGHLIGHTS:

• After a two-sided trade, wheat closed higher in all three US classes. This comes despite a lower close for Matif wheat futures and a rise in the US Dollar Index. Support may have come from news that the International Grains Council reduced their world wheat production estimate for 24/25 by 3 mmt to 795 mmt. For reference, the USDA is using a figure of 798 mmt.
• The USDA reported an increase of 0.7 mb of wheat export sales for 23/24 and an increase of 8.3 mb for 24/25. Shipments last week at 7.2 mb fell below the 16.2 mb pace needed per week to reach the USDA export goal of 720 mb. Total export shipments at 651 mb for 23/24 are up 2% from last year.
• According to the USDA as of May 21, 25% of the US winter wheat area is experiencing drought conditions; this is unchanged from the previous week. Additionally, just 3% of spring wheat acres are said to be in drought, a massive drop from last week’s 14%.
• Day two on the Illinois wheat crop tour came up with an average yield of 105 bpa, up from 97 bpa last year. The USDA has an initial forecast for Illinois at 83 bpa, which would be down from the record 87 bpa last year.
• Argentina is expected to remain mostly dry, but cold into next week. Northeastern areas may get some rains later in the week, but with the cold comes the risk of frost. This is causing some concern regarding winter wheat planting, which is just beginning, as well as establishment of the crop.

DAIRY HIGHLIGHTS:

• On Class III, front month May futures fell 7 cents but most other contracts were higher on the day. Second month June closed up a penny at $19.96.
• Spot cheese was mixed on the day with higher blocks and lower barrels, but the overall average was down for a fourth straight day to $1.93125/lb.
• Class IV action was mostly higher with June up a nickel to $21.38. This puts it at a $1.42 cwt premium to its June Class III futures.
• Both Class IV spot products were higher with butter up a penny and powder up 1.50 cents. Spot butter’s close at $3.1225/lb is a new high for the move.

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Author

Brandon Doherty