CORN HIGHLIGHTS:

• The corn market traded down in excess of 5% with traders booking profits ahead of the weekend on disappointing export sales and forecasts call for rain next week across the “I” states.
• Forecasts for rain across the Midwest dominated the trade with the longer range 6 – 10 and 8 – 14 day outlooks shifting to more normal to above normal precipitation patterns, while the 7-day forecast has rain favoring the northern Midwest with less in MO, central IL and IN.
• US export sales came in at a disappointing 36k tons for Old Crop versus 272k last week, well below the 470k tons in sales needed each week to reach the USDA’s goal. As for New Crop sales, the USDA reported 47k tons sold.
• Further hampering US export sales, Brazilian offers continue to be $30 – $40 per ton cheaper than the US as they continue to harvest their large second (safrinha) corn crop.
• It’s estimated with the latest run of the US Drought Monitor, that 64% of the corn crop is in areas with some level of drought, which includes 82% of Illinois and 83% of Iowa.

SOYBEAN HIGHLIGHTS:

• Soybeans closed lower today with New Crop leading the way lower and July only down slightly. Soybean meal closed sharply lower, while soybean oil moved higher thanks to a jump in palm oil of 1.7% today.
• Changes in the weather forecast have pressured both corn and soybeans with the 7-day forecast from NOAA showing an accumulated 0.5 to 1.5 inches of rain over the next week in the very dry areas of Iowa, Illinois, and Indiana.
• Export sales were better this week at 16.8 mb for 22/23 and increases of 6.2 mb for 23/24. Last week’s export shipments of 14.2 mb were better than expected and above the 11.7 mb needed each week to meet the USDA’s expectations.
• Next week, crop progress will be released, and conditions could decline after this week’s dryness. If weekend rains come through, conditions could remain steady with last week.

WHEAT HIGHLIGHTS:

• The USDA reported an increase of 4.0 mb of wheat export sales for 23/24, and an increase of 0.5 mb for 24/25. The figures for corn and soybeans were not much better and may have contributed to today’s weakness.
• Several other factors are likely weighing on markets today – weather being number one. With both the American and European models putting rain in the forecast mid to late next week for the Midwest, wheat followed corn and soybeans lower today. Other factors may be profit taking, as well as the recent interest rate increases by European banks, which are causing renewed concern about recession.
• US futures received no support from Matif wheat, which traded lower today. Matif wheat is also overbought on daily stochastics and is showing potential sell signals, painting a weak technical picture despite the fact that French wheat conditions have declined for four weeks in a row.
• Position squaring before month end could be playing into the grain complex trade as well. With the recent strong rally and the June 30 Stocks and Acreage reports due for release next week, traders may be taking profit ahead of uncertain results.
• Russia has essentially said they are unwilling to extend the Black Sea grain deal beyond the July 18^th This does not seem to be impacting the market much, however, perhaps because traders have heard this story before.

DAIRY HIGHLIGHTS:

• Second month, Q3, and Q4 Class III contracts all closed higher this week; Class IV fared similarly although Q4 did fall 3 cents.
• The spot markets for cheese, whey, powder, and butter were mixed with marginal gains and losses.
• May butter inventory was 14% larger while cheese inventories were 1.5% smaller than last year.
• US dairy cow culling for the week ending June 10th, up 13.7% from the same week last year.

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Author

Brandon Doherty