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

CORN HIGHLIGHTS:

• The corn market ended the week with choppy trade, before settling firmer on the day. Trade reflected movements in the wheat market and position squaring with June options expiration and the 3-day Memorial Day weekend.
• The July corn futures finished the week 12 ¼ cents higher but is still under the influence of the weekly bearish reversal on the charts established last week. Though prices were higher, this was a week of consolidation off last week’s trade.
• The International Grain Council adjusted their global corn production forecast for the 24/25 production year. The IGC reduced corn production by 10 mmt with reductions in Argentina’s corn crop. This leaves global production forecasted at 2.312 billion mt, still up 1% year over year.
• Rainfall moved across the western Corn Belt, and key production areas in that region remain wet and will limit planting pace this week. The area of Northwestern IA and Southwestern Minnesota is experiencing one of the wettest April/May time frames in over 100 years.
• 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.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher with support from a strong close in soybean meal and more wet weather in the forecast that could continue to delay planting. Soybean meal gained 2.60% in the July contract, while soybean oil closed lower with the July contract down 0.53% today.
• For the week, July soybeans gained an even 20 cents finishing at 1248, November gained 16 ¼ cents at 1219 ½, July soybean meal gained $17.70 at $386.50, and July soybean oil lost 0.32 cents at 44.95 cents. Soybean meal was the clear leader this week as weather issues in South America raised concerns over how much soybean meal Argentina would be able to export.
• In the state of Rio Grande do Sul in Brazil, rainfall has become less frequent and much of the flooding has receded which has given farmers the opportunity to resume harvest. The state has now harvested 91% of its soybean area, which is up from 85% last week but compares to the historical average of 97%.
• Another source of support is that US soybeans are now more 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.

WHEAT HIGHLIGHTS:

• Wheat closed higher across the board, except for July and September Chicago, which posted losses of less than a penny each. Kansas City wheat, on the other hand, led the way to the upside with double digit gains in the front months. Notably, the seven dollar area for Chicago wheat appears to still hold as strong resistance for now.
• Ukraine is said to have attacked a Russian military target last night in Crimea. So far, the market seems relatively unfazed by this news. But, if there are additional attacks on Russian port infrastructure, it could add some war premium back to the wheat market.
• Argentina’s wheat belt is anticipated to yield 41% more wheat in the 24/25 season compared to 23/24. This, according to the Bahia Blanca Grain Exchange, covers the provinces of Buenos Aires and La Pampa. Production in that region is estimated to reach 4.7 mmt, with acreage up 7% year over year. Yields are expected to rise 11% year over year due to much improved soil moisture and anticipated good weather.
• Managed funds are said to have flipped their net short wheat position to now be net long both Chicago and Kansas City wheat futures combined. They are also said to be long Matif wheat futures. This would indicate that they see more potential upside movement for the wheat market, which could be due to the recent declines to crop conditions in the Black Sea region.
• The potential for a Canadian railway strike could have effects here in the US. Rail workers were originally set to strike on May 22, but the Canadian government intervened, delaying the strike. According to the USDA, Canada was the destination of $28.2 billion of ag goods in 2023. If it does occur, it may affect not only trade in the US, but producers and consumers alike.

DAIRY HIGHLIGHTS:

• Class III futures were mostly higher, led by the September futures contract which gained 17 cents to close at $19.83/cwt.
• The spot cheese average was down for the fifth consecutive day in a row losing 0.625 cents to close at $1.9250/lb. Spot whey was the only product during the session to see an improvement of half a penny to close at $0.40/lb.
• Class IV prices slid on Friday with weaker product trading. June through September futures all saw losses with the August contract dropping the most at 24 cents to go home at $21.95/cwt.
• Spot butter was unchanged on the day at $3.1225/lb while futures were down anywhere from 1-4 cents. Spot powder lost 1.50 cents to $1.1750/lb.

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Author

John Heinberg