CORN HIGHLIGHTS:

• The corn market finished with marginal gains to start the week as the market held firm against a strong selloff in wheat and likely was squaring positions before Wednesday’s USDA WASDE report and the potential for a hot forecast.
• Weather models are predicting above normal temperatures to move into the Corn Belt into late June. Early indications are for the heat to be joined by an active rainfall pattern. The key for the market will be the extent of the heat and does the moisture stay in the forecast going into July.
• Managed money has been extending their short position in the corn market. On Friday’s Commitment of Traders report, funds were net sellers of 79,229 corn contracts to move their net short positions to 212,706 short positions.
• The USDA will release the latest Crop Progress report this afternoon. Expectations are for corn planting to reach 96% complete. The focus will be crop conditions, as the corn crop is expected to be 74% good/excellent, down 1% from last week.
• Weekly export inspections remain strong for US corn. Last week, US exporters shipped 52.7 mb (1.340 mmt) of corn, down slightly from the prior week. Total inspections for the marketing year have reached 1.540 billion bushels, up 26% from last year.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher to start the week but were heavily bull spread with the July contract gaining 9 cents, while the November contract gained only one cent, likely indicating that the trade is expecting a large upcoming soybean crop. Soybean meal led the complex higher today with the July contract gaining 2.02%, while soybean oil was mixed with gains in the two front months but losses in the deferred contracts.
• This week’s Export Inspections report was relatively soft with soybean inspections totaling 8.5 mb for the week ending June 6. Total inspections for 23/24 now total 1.490 billion bushels which is down 17% from the previous year. With export sales poor in general, there is a possibility that the USDA will lower exports in Wednesday’s WASDE report.
• Today, the USDA will release its first crop ratings for soybeans in the Crop Progress report. Trade estimates have an average guess of 72% good to excellent with the high end of guesses at 75%. 89% of the crop is expected to be planted, which would compare to 78% last week.
• Friday’s CFTC report showed funds as aggressive sellers in the soy complex adding 45,523 contracts to their short position as of June 4, leaving them net short 59,741 contracts. Funds were heavy sellers across the entire ag complex last week.

WHEAT HIGHLIGHTS:

• Wheat closed sharply lower across all three US classes. Continued pressure is coming from Paris milling wheat futures, which have closed lower for the sixth consecutive session. The recent sharp rise in the US Dollar Index is also offering weakness, as is the recent news that Turkey will ban wheat imports until October 15. Additionally, Russian FOB export values are said to be dropping, ending last week at $242 per mt compared with $248 the week prior.
• Weekly wheat inspections as of June 6 totaled 12.9 million bushels, with 11 million bushels for the 24/25 season. This puts 24/25 inspections down 7% from last year. However, the USDA estimates that 24/25 wheat exports will increase by 8% from the previous year to 775 mb.
• Friday’s CFTC data indicated that, as of last Tuesday, managed funds added only 8,000 contracts to their net short in the wheat complex, indicating that the recent selloff was likely not driven by fund selling.
• This Wednesday will feature the monthly USDA Supply and Demand report. There is anticipation that they will lower the Russian crop to between 82-84 mmt, compared with 88 mmt a month ago. Additionally, Sov Econ reduced their estimate of the Russian crop to 80.7 mmt last week, down significantly from their early season estimate of 94 mmt.
• Last year, Australia’s wheat crop totaled 26 mmt. But expectations are for an increase to production this year, with Rabobank estimating a 27.4 mmt harvest. The Australian Bureau of Agricultural and Resource Economics is even higher, pegging the crop at 29.1 mmt.

DAIRY HIGHLIGHTS:

• A 5.25 cent jump in blocks and 1.25 cent gain in barrels brought the spot cheese price to $1.9325/lb at today’s close. Whey was unchanged.
• This helped influence a strong Class III trade in which the July and August contracts were up more than 60 cents. The second month contract closed at $20.61.
• Class IV’s spot trade saw unchanged powder and a 1.25 cent drop in spot butter, which finished at $3.08/lb and close to the middle of the last couple weeks’ range.
• Class IV contracts were either unchanged or faced small losses. October futures fell 14 cents on 48 contracts traded, otherwise volume was light.

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Author

Amanda Brill