CORN HIGHLIGHT

• A break in the U.S Dollar Index, likely a resolution to the debt ceiling concerns, and strong outside markets supported corn futures for most of the session. July corn saw prices erode as demand concerns stay in the forefront of the market, and the competition for cheaper newly harvested Brazil corn is starting to come to the export market.
• New crop corn futures added some premium as precipitation chances for the heart of the Corn Belt were pushed further back into next week, but weather models are still looking for a significant pattern change into mid-June.
• Most recent drought monitor maps reflected the current dry conditions across the Corn Belt as areas of abnormally dry and Level 1 drought conditions developed across the key corn producing states of Iowa, Illinois, and Indiana.
• Private analysts continue to raise their Brazil 2^nd crop corn production estimates higher, as StoneX raised their estimates to 102.9 MMT from their estimate of 100.8 MMT in April.
• The USDA will release weekly export sales on Friday morning, expectations are for old crop corn sales to range from –100,000 MT to 400,000 MT as U.S. corn continues to struggle against export competition.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day significantly higher and were led by gains in soybean oil and crude oil. Malaysian palm oil and other world veg oils have moved higher supporting soybeans. Soybean meal closed higher as well.
• The forecast for most of the Corn Belt is dry until the middle of this month with some scattered showers in the interim, but many producers need rain and higher futures are reflecting that. The market will likely trade weather in the absence of other news.
• The debt ceiling issue seems to be resolved with the agreement passing through the House and now on to the Senate where it will most likely be successful. Traders and markets have reacted positively to the resolution with the stock market working higher today too.
• One other concern for soybeans is China’s economy and the sluggish economic data that was released yesterday. Soybeans on the Dalian exchange have fallen to their lowest levels in two years at the equivalent of $14.47 a bushel. Sagging prices of Chinese stocks, copper, and crude oil have also pointed to a slowing economy.

WHEAT HIGHLIGHTS:

• The US dollar is sharply lower today, which may have given wheat some room to run higher.
• All three classes of US wheat futures are still at, or near, oversold levels on daily stochastics. After yesterday’s reversal and today’s follow through, a near term bottom may be in place.
• With the exception of dry Russian spring wheat areas, and drought in Spain, most of Europe and the Black Sea have seen favorable wheat crop conditions.
• China has recently received heavy rains in their wheat growing regions. This could cause quality issues, which may result in more of their wheat being used for feed.
• Today’s Drought Monitor map shows an increase in dry conditions throughout the eastern and central parts of the Midwest. The SRW crop should still be in good shape with plenty of soil moisture, but if the pattern persists it could be cause for concern.
• According to the UN, only 6 grain vessels have left Ukraine since the last deal extension. Russia is believed to still be restricting or delaying movement of ships.

DAIRY HIGHLIGHTS:

• An 8.25 cent jump in cheddar blocks and 1.25 cent increase in cheddar barrels kept support in place for spot cheese for now.
• July Class III futures responded with a nice 41 cent rally today to close at $16.56, entering Friday’s trade just 2 cents lower for the week.
• Spot whey continues to struggle as it has now dropped back within a quarter cent of the all-time low set on May 22.
• The Class IV market got in on the buying today with the June through November contracts all green at the close, and put together one of its highest volume days in recent memory.
• This came on a quiet but positive spot trade in which butter garnered a penny and spot powder was 1.50 cents higher.

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Author

Bryan Doherty