CORN HIGHLIGHT

• Weak Chinese economic data, demand concerns, and a weather forecast showing the potential for a more active pattern weighed heavily on corn prices to start the session, but end of month profit taking and position squaring lifted corn to a steady to lower close.
• Tuesday evening weather models continue to show the potential for increased precipitation and cooler temperatures for the second week of June in areas of the Corn Belt, limiting the new crop futures ability to rally.
• The USDA released the first corn crop ratings on Tuesday afternoon. The USDA stated that 69% of this year’s crop rated good/excellent as of Sunday night. Expectations were for the crop to be 71% good/excellent and in line with the 5-year average. Last year’s first initial crop rating was 73% good/excellent. Corn planting reached 92% complete, up from 81% last week and in line with expectations.
• The firmer close off the session lows may indicate a market looking for more information.  While demand news stayed quiet, weather forecasts can have a tendency to change. Money flow may have been more neutral, looking for more confirmation of a true weather pattern change. The movement of wheat futures turning higher into the close likely supported the corn market in the afternoon.

SOYBEAN HIGHLIGHTS:

• Soybeans began the day sharply lower driven by another significant drop in soybean oil, but prices managed to somewhat recover through the day with July soybeans ending higher, deferred months lower, and soybean oil relatively unchanged.
• Disappointing economic numbers out of China added bearish pressure to the market with their PMI data showing a slowing in the economic activity over the past month.
• China is still a buyer of Brazilian soybeans despite the poor economic data and purchased 5 more July soybean cargoes in addition to the 10 to 12 last week. Some analysts estimate total Chinese soybean imports closer to 102-104 mmt compared to the USDA’s estimate of 98 mmt.
• Brazil has reportedly made some rare soybean sales to the US equal to a combined 120,000 metric tonnes. Brazil has now passed the US in both soy and corn exports.
• Yesterday’s USDA weekly Crop Progress report showed a jump in soybean planting to 83% completion vs 65% on average, and 56% of the crop is emerged vs 40% on average.

WHEAT HIGHLIGHTS:

• The USDA rated the US winter wheat crop condition at 34% good to excellent versus 31% last week and the spring wheat crop at 85% planted only slightly behind the 86% average.
• Despite recent rains, the winter wheat crop in Kansas is still struggling with a 69% poor to very poor rating. The rain is probably too late to help the wheat crop, but could benefit corn and soybeans.
• End of month profit taking and position squaring possibly added to the strength in the wheat market along with anticipation that a US debt ceiling deal may be reached.
• Russia is still said to be lowering their wheat export prices, now at $230-$240 per ton. Alongside the rising US dollar, both factors may pressure the US export market and limit upside for wheat futures.

DAIRY HIGHLIGHTS:

• Another 25 loads of cheese traded in the spot session on Wednesday as the block/barrel average fell once again by 0.375c.
• Blocks fell a penny to $1.42/lb, closing at its lowest price since May 2020. The low trade during the session was $1.4150/lb and the high trade was $1.43/lb.
• The cheese barrel market did catch a bid, closing up 0.25c to $1.4975/lb on 11 loads traded.
• Milk futures reacted negatively once again to the offering in cheese. The June contract fell 15c to $15.41, while July lost 17c to $16.15.
• Today was the last trading day for the May 2023 dairy contracts. They will be settled tomorrow and June will now move into the front month spot.

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

Brandon Doherty