CORN HIGHLIGHTS:

• Disappointing close in the corn market as prices failed to hold early session strength and finished lower on the day. The July contract led the push lower as the old crop market is looking for news to push the market higher.
• Early session gains were fueled by optimism of an easing of the U.S.-China trade tension as negotiations in London reach some agreements. While it is still not a major trade agreement, it is still a stepping stone to further talks between the two countries.
• The USDA will release the June WASDE report on Thursday. Analysts are expecting little change in the new crop forecasts from May, but the focus will be on demand projections for the old crop. Expectations are for adjustments higher in export demand, which could lower corn carryout for 2024-25 below 1.400 billion bushels.
• Weekly ethanol production last week reached a record high of 1,120K barrels per day in the week ending June 6. An estimated total of 108.6 mb was used in ethanol production last week. This total was on pace to reach the USDA target for corn usage for the marketing year. Ethanol stocks slipped to 23.7 million barrels, down from 24.4 million barrels from last week.
• The USDA will release weekly export sales on Thursday morning. Corn export demand has been strong as sales are nearly reaching the USDA market-year target. Shipments may be the key number going forward as U.S. bushels are not competing against South American bushels on the export market.

SOYBEAN HIGHLIGHTS:

• Soybeans couldn’t keep up the momentum from early morning gains, closing lower on the day as a bearish weather outlook leads to choppy price action. July futures have been relatively flat with prices floating in a 13-cent range between $10.50 and $10.63 so far this week.
• Tomorrow’s WASDE report is expected to show 2025/26 world ending stocks at 124.5 mmt, which would be higher than May’s 124.3 mmt number. Estimates for U.S. 2024/25 carryout are at 351 mb, while 2025/26 estimates are at 298 mb.
• Anec sees Brazil’s soybean exports for the month of June reaching 14.08 mmt, up from last week’s estimate of 12.55 mmt.
• Trade talks between the U.S. and China were reportedly successful with the two sides agreeing to a framework deal which would include magnets and rare earth minerals. There was no mention of U.S. agricultural goods, but now that the two sides seem to be on better terms, a deal could come into play at some point.

WHEAT HIGHLIGHTS:

• Wheat closed mostly higher, led by Minneapolis futures. Support came from a drop in the U.S. Dollar Index, which itself was tied to today’s CPI report that showed consumer prices increased 0.1% in May compared to expectations of a 0.2% increase.
• Tomorrow will feature the monthly WASDE report. The average pre-report estimate of old crop wheat stocks at 844 mb, compared to 841 mb last month. New crop is estimated at 919 mb versus 923 mb last month, with production pegged at 1.925 bb.
• While U.S. weather remains mostly favorable, the southern Midwest and southeast Plains are still too wet. Continued rains will delay winter wheat harvest activity and could also affect quality and production.
• According to the European Commission, EU soft wheat exports are down 33% year over year at 19.5 mmt as of June 8. This compares with 29.2 mmt shipped through the same time last year.
• The Rostov area of Russia, which is their biggest grain production region, has declared a state of emergency due to drought. Spring frosts were also an issue, though less damaging than they were a year ago. This region is set to begin harvest the second part of June.

DAIRY HIGHLIGHTS:

• Class III and IV milk futures closed red again today as cheese demand has noticeably cooled off while butter and powder stay off of recent highs.
• July Class III milk lost another 27c today and currently sits $2.03/cwt off of the May 28th high just 11 sessions ago.
• The market is lacking fresh bullish news, and the bears have taken over during this quiet period. It doesn’t help that demand in the spot trade is lacking.
• Increasing cow numbers and a building cheese inventory could also be adding pressure on prices.
• The market will watch for tomorrow’s Supply and Demand report to see what the USDA is forecasting for pricing and production the rest of the year.

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Author

John Heinberg