CORN HIGHLIGHTS:

• Disappointing price action started the trading week in the corn market as prices faded off overnight highs to finish the day lower overall. On the charts, corn futures posted a reversal day by trading past Friday’s high and low prices and settling in the bottom of the trading range for the day. The negative price action at the close could leave the door open for follow-through selling going into Wednesday.
• Corn futures are followers to other grains. Wheat futures had a strong overnight session on continued fears of Russian dryness affecting the wheat crop, but as prices faded, corn futures slipped during the session. Soybean futures saw strong selling pressure during the session, and that limited the potential for gains in the corn market on Tuesday.
• The USDA will release the latest round of crop planting progress this afternoon. Expectations are for corn planting to advance by 13% to 83% complete. This would keep corn planting close to the 5-year average for this date. While the last 10-15% of planting may be difficult due to wet weather, the market may be shifting its focus away from planting and looking to summer weather and crop development.
• Weekly export inspections for corn remain strong. Last week, US exporters shipped 42.4 mb (1.077 mmt) of corn last week. This brings total inspections in 23/24 up to 1.429 bb, up 26% from last year.
• The USDA announced a flash sale of corn to Mexico this morning. Mexico purchased 8.5 mb (215,000 mt) of corn with the total split between marketing years. Of the total, 165,000 mt is for the 23/24 marketing year and 50,000 mt is for delivery during the 24/25 marketing year.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower to start the week as they followed the sharp selloff in soybean meal in which the July contract posted a loss of 2.56%. Soybeans had been trading higher overnight but began fading this morning and continued the downward trend. Soybean oil was higher by 1.27% in the July contract.
• With the wet weather delaying corn plantings, there is some concern that soybean plantings may increase past the USDA’s initial estimate of 86.5 million acres. The Midwest received significant rains last week and there are more in the forecast for this week.
• Later today, the USDA will release its Crop Progress report in which analysts are estimating that soybean plantings will be 67% complete. This would be in line with the 5-year average and would compare with 52% last week and 83% at this time a year ago.
• Today’s weekly export inspections showed an increase for soybean inspections totaling 7.8 mb for the week ending May 23. This was slightly above last week but still puts total inspections for 23/24 down 18% from the previous year at 1.469 bb.

WHEAT HIGHLIGHTS:

• Wheat closed with gains in all three US classes, led by the Kansas City futures, with support coming from global concerns about production in the Black Sea region and parts of Europe. However, the wheat complex closed well off session highs, with pressure coming from lower Paris milling wheat futures and the US Dollar strengthening throughout the session.
• IKAR reportedly lowered their estimate of Russian wheat production by another 2 mmt to 81.5 mmt. Their estimate is now 11.5 mmt below where it was a year ago. For reference, the USDA is using an 88 mmt figure. Additionally, the European Grain Union lowered their European wheat production forecast by about 3 mmt to 19.2 mmt due to recent drought conditions.
• The Ukrainian Grain Association reduced their 2024 grain outlook for Ukraine from 76.1 mmt to 74.6 mmt. This is said to be a result of reductions to the planted area as well as unfavorable prices, logistics issues, and dryness during May in the south and eastern parts of the nation. Of that total 19.1 mmt of wheat is forecasted to be harvested, versus 22 mmt in 2023.
• Weekly wheat inspections at 14.7 mb bring the total 23/24 inspections to 672 mb, which is down 7% from last year. With the USDA estimating 720 mb of wheat exports, inspections for 23/24 are running behind the USDA’s estimated pace.
• Short term weather in the US southern Plains may cause some early harvest delays with the forecast looking wet. However, areas to the north will also get this rain that will help to finish the crop.

DAIRY HIGHLIGHTS:

• A weaker butter trade kept dairy futures on edge Tuesday. This follows Friday’s Cold Storage report that showed April butter inventories growing 14% from last month and adding 9% from a year ago.
• Most butter futures contracts finished the day limit down, falling 7.50c each.
• The cheese trade was quiet (blocks down 0.75c and barrels unchanged), but the weakness in butter and Class IV added pressure to Class III futures.
• All dairy spot products finished the day in the red.
• Class IV milk futures posted their largest down day in months.

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Author

Amanda Brill