CORN HIGHLIGHTS:

• Corn futures faced sharp selling pressure on Tuesday, with weakness in the July contract spilling over into the broader complex. The market was weighed down by strong planting progress, early harvest reports from Brazil, and growing concerns about waning U.S. export demand.
• Brazil has just begun its harvest of their second crop corn. The weather has been very good for most regions, and the market is anticipating a strong crop. USDA is currently projecting this crop at 130 MMT, but there are “whisper” numbers up to 140 MMT.
• Brazilian corn prices have fallen, making them competitive with U.S. exports. Reports suggest that some Asian buyers secured Brazilian supplies this week, raising the risk of U.S. export sales cancellations as demand shifts south.
• U.S. planting is nearing completion, with the USDA reporting 87% of corn acres planted as of May 25, up 5 percentage points from last week. While national progress is on track, states like Illinois and others in the Eastern Corn Belt remain behind average, largely due to excessive rainfall. Final planting dates in these regions are fast approaching in early June.
• USDA released the first initial corn crop ratings in Tuesday’s report. As of May 25, the USDA found that 68% of the crop was good/excellent. This was 5% below analysts’ expectations. These ratings were the third lowest in the past 10 years and 4% behind the 3-year average. Wet and cool temperatures limit a strong start in some areas and capped the first crop ratings.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower with the July contract closing just below the 100-day moving average for the first time since the beginning of the month. There has been little fresh news, but the continued quick planting pace and lower soy products were the primary pressure today.
• Yesterday’s Crop Progress report saw the soybean crop 76% planted, which compared to 66% last week and the 5-year average of 68%. 50% of the crop has emerged, and good to excellent ratings will likely come within a few weeks.
• In Argentina, the recent rains and severe flooding near Buenos Aires will likely impact the country’s total production. One prominent South American crop scout has lowered their estimate by 1.6 mmt for total production of 48.5 mmt. In Brazil, soybean production is estimated near 170 mmt.
• At this time, funds are estimated to hold a net long position in soybeans of around 10,000 contracts and are estimated to have a long position in soybean oil around 59,000 contracts. In soybean meal, however, they hold a net short position of over 100,000 contracts, which is a record short position and could trigger short covering at some point.

WHEAT HIGHLIGHTS:

• Wheat futures closed mixed after choppy trade, with Minneapolis leading to the upside following weaker-than-expected spring wheat condition ratings. In contrast, HRW wheat came under pressure as recent rains and warming temperatures are expected to benefit the crop. Technically, both Chicago and Kansas City contracts have lost momentum, with daily stochastics and RSI indicators turning lower, while Minneapolis futures trend sideways to higher.
• USDA’s Crop Progress report showed winter wheat conditions declining 2 points to 50% good/excellent, while 75% of the crop is headed—above the 70% five-year average. Spring wheat planting reached 87% (vs. 80% avg.), and 60% of the crop has emerged. However, only 45% was rated good/excellent, missing expectations and supporting Minneapolis’ futures.
• India’s wheat harvest is reportedly going well and is now expected to be about 4 mmt above last year’s crop. This could push their state reserves to 44 mmt this year, well above what is needed to meet domestic demand. This has effectively eliminated earlier anticipation that they might need to import wheat this year, which is now likely to pressure global prices. Despite this, however, the Indian government still has no plan to allow wheat exports, which were prohibited in 2022.
• According to the German association of farm cooperatives, their nation’s 2025 wheat harvest is expected to total 21.01 mmt, which would be down 0.40 mmt from their previous estimate. However, if realized this would still be a 13.6% larger crop year over year. Yield reductions from late winter frosts and drought in the spring are cited as the reasons for the decline from the prior estimate.

DAIRY HIGHLIGHTS:

• Class IV futures were once again higher at the halfway point of the week. August futures led the way higher, improving 67 cents to close at $19.87.
• Spot butter improved for a fourth straight session to close at $2.5250/lb. Powder gained 1.50 cents to close at its highest level since mid-February at $1.2850/lb.
• Class III futures pulled back slightly Wednesday with losses ranging from 1-26 cents. However, both November and December futures were higher by 1 cent and 8 cents respectively.
• Spot cheese pushed back above the $1.90/lb level, closing at $1.9075/lb today. Spot whey also found some support, tacking on 1.50 cents to go home at $0.57/lb.

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Author

Amanda Brill