The CME and Total Farm Marketing Offices Will Be Closed Wednesday, June 17, in Observance of Juneteenth

CORN HIGHLIGHTS:

• Difficult day in the corn market as the sellers took back control of the market to close the week. The weak price action posted negative technical signals in the corn market, which could lead to additional selling pressure to start next week. For the week, July corn finished the week 1 ¼ cents higher but well off the highs for the week.
• Bear spreading was dominant in the corn market as the July futures sold strongly. The weakness in July was likely reflected in the cash market and farmer movement of corn off Thursday prices strength. The spreads between July and September and December dropped significantly since Wednesday in the futures market.
• Seasonally, the corn market typically turns more negative as the crop is being put together. The lack of bullish news and the prospects of growing supplies will likely limit the market’s upside until there is a change in the market based on a supply concern or a strong uptick in demand.
• Weather models are predicting above normal temperatures to move into the Corn Belt into late June and early July. The key will be precipitation, which early indications are for the rainfall to stay active in the western and northern Corn Belt, but the eastern Corn Belt is looking to turn drier.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower giving back the majority of yesterday’s gains, but overall, prices have been relatively rangebound for the past two weeks. There was little bullish support from the WASDE report, so the focus is now on weather which is expected to be mostly hot and dry this month. Both soybean meal and oil ended the day lower today as well.
• On Monday, the NOPA crush report will be released, and crush is expected to come in at 178.352 million bushels. If realized, this would be up 5.3% from April’s crush of 169.436 mb. It would also be the largest May crush on record. With export demand poor, crush demand is helping support futures.
• In South America, the Buenos Aires Grain Exchange updated their estimates for grain production, but left soybeans unchanged from last month at 50.5 mmt. 96% of the soybean crop is estimated to be harvested at this point. Yesterday morning, CONAB updated its estimates for Brazilian soybean production to 147.354 mmt.
• Brazilian soybean premiums declined the second half of the week after the Brazilian government’s tax plan was rejected by the Brazil Congress. With the threat of higher expenses off the table, the Brazil soybean market saw prices fall back into competition with US and Argentina export prices.

WHEAT HIGHLIGHTS:

• All three US wheat classes closed lower across the board today. This was in tandem with Matif wheat, which also closed lower. After breaking support yesterday at the 50-day moving average, the September Paris contract closed below that level again today. Next support is about six euros lower at the 200-day moving average. This does not bode well for supporting the US market.
• The US Dollar Index reached fresh near-term highs today at the 105.80 area. This is the highest level seen since the beginning of May, and this is putting pressure on the grain complex and wheat in particular. Harvest pressure is also limiting upside potential with progress ahead of the average pace and HRW yields coming in better than expected so far.
• To add to bearish pressure, Ukraine’s ag minister is said to have increased their estimate of 2024 wheat production to 21 mmt. This is 1.5 mmt above the USDA’s estimate, and also goes against the USDA lowering their estimate to 19.5 mmt on this week’s report. Additionally, the Ukraine ag ministry is anticipating exports will hit 15 mmt vs the USDA’s guess of 13 mmt.
• According to the Buenos Aires Grain Exchange, Argentina’s wheat planting has reached 46% complete, up 20% from the previous week. Additionally, the Rosario Grain Exchange has pegged Argentina’s wheat crop at 21 mmt, exceeding the USDA estimate of 17.5 mmt.
• Drought in China may result in a lower grain output, and ultimately more imports. In the marketing year through June 2025, Chinese wheat production is expected to fall to 134 mmt, a reduction of 1.24%. In addition to the dry weather, the high temperatures may hurt yields in the northern region.
• Recent rains have improved the outlook for grain production in western Australia. According to the Grains Industry of Western Australia, their estimate of 2024 planted wheat area has increased to 5 million hectares from a May estimate of 4.7 million hectares.

DAIRY HIGHLIGHTS:

• Class III prices struggled Friday on a weaker spot trade. Class III futures contracts were down anywhere from 2-44 cents bringing with it the 2024 Class III average which dropped 20 cents to close at $18.58/cwt.
• Spot cheese was down 0.75 cents on the day leading to weaker milk prices but still posted a weekly gain of 9.50 cents. Spot whey lost a penny to close at $0.47/lb.
• Class IV prices were little moved with spot products going unchanged and light volume futures trading.
• Both spot butter and powder went unchanged on the day at $3.09/lb and $1.1925/lb.
• Reminder that the Total Farm Marketing offices will be closed on Wednesday, June 19th in observance of the Juneteenth holiday.

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Author

Brandon Doherty