CORN HIGHLIGHTS:

• Corn prices consolidated again around the $5.00 price level as futures were firmer on Tuesday. December corn traded around the $5.00 area for the seventh consecutive session as traders square positions before Wednesday’s USDA report.
• The USDA will release the July Supply/Demand report on Wednesday at 11:00 CST. Expectations are for corn yield to drop to 176.6 bushels/acre, down 4.9 bushels/acres from the June report. Despite the yield drop, the additional acres and possible demand adjustment will likely keep new crop corn carryover near 2.250 billion bushels on the report.
• Improved weather across the Corn Belt was reflected in the weekly USDA crop rating released on Monday afternoon. The USDA crop ratings on Monday afternoon gained 4% to 55% good/excellent, slightly above analyst expectations. Nebraska saw the largest improvement, gaining 12% week over week. Illinois gained 6% in the good/excellent category but is still well behind the 5-year average at 39% good/excellent.
• The weather forecast will limit any near-term rally and rainfall chances and above-normal temperature should help additional crop recovery in some areas and stabilize the crop into pollination.

SOYBEAN HIGHLIGHTS:

• The USDA rated the US soybean crop as of Sunday, July 9, at 51% good to excellent, a 1% increase from last week, but also 1% below trade expectations and 11% below year-ago levels. Although soybean crop conditions improved, they remain at their lowest levels since 2012.
• The average trade guess for 2022 ending stocks on tomorrow’s USDA WASDE report is 232 mbu, up 2 mbu versus the June estimate of 230 mbu, largely due to reduced demand. For 2023, due to much reduced acres, the average estimate for ending stocks is 203 mbu with a 51.3 bpa, versus a 350 mbu estimate last month.
• The trade estimates Brazil’s soybean production to come in at 156.2 mmt in Wednesday’s USDA report, up slightly from the June estimate of 156 mmt. For Argentina’s production, the average trade guess is 23.6 mmt, 1.4 mmt lower than in June.
• South American basis is improving which is allowing US soybeans to be more competitive in the world market, though they remain above SA offers.
• It has been rumored that China bought 10-14 cargoes of US soybeans off the PNW for October delivery for their reserves.
• Over the next 10 days, Minnesota, the Dakotas, Wisconsin, and northern Iowa are all expected to be mostly dry, with decent rain expected through eastern Nebraska, southern Iowa and Missouri, and into Illinois and the eastern Corn Belt.

WHEAT HIGHLIGHTS:

• Yesterday afternoon’s USDA Crop Progress report kept winter wheat condition unchanged at 40% good to excellent, with harvest still well behind at 46% complete versus the average of 59%.
• Spring wheat conditions declined 1% to 47% good to excellent. The northern Plains could use some more rain to help this crop, but little is in this week’s forecast. Canda’s crop is also in a similar situation where more moisture is needed.
• According to CONAB, as of July 1st, Brazil’s wheat crop is 79.6% planted, with Argentina’s reported to be 81.4% planted.
• Japan is tendering for 60,000 mt of feed wheat. While it is possible this may stir up some US export business, Russia continues to offer cheap wheat FOB exports at $235-$240 per ton. However, interior Russian wheat prices are said to have recently rallied.
• Paris milling wheat futures posted gains for the first time in three sessions, which offered some support to the US market today. Additionally, the US Dollar continues to fade off of recent highs, allowing more upside potential for wheat futures.
• Daily stochastic indicators show that Chicago wheat is technically oversold and is close to a crossover signal. Barring any surprises in tomorrow’s USDA report, this would indicate that it could be due for more of a correction to the upside.

DAIRY HIGHLIGHTS:

• The cheese market has closed higher in four straight sessions, closing up 12c from last week’s low and back to $1.46/lb.
• The return of steady bidding in cheese has brought buyers back into the milk futures market. August class III is already trading $1.15 above Monday’s low.
• Class III and IV milk futures closed up strongly on Tuesday. August class III is back up to $15.23, while September holds at $16.28.
• The USDA will put out its July WASDE supply and demand report tomorrow.
• Whey, powder, and butter futures were mostly higher during the session as well.

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Author

Brandon Doherty