Corn is mixed at midday with front month July lower by two cents but the December contract 4 cents higher. Traders will be fixated on weather and dryness should drive prices higher.
The 6–10 day forecast is mostly dry in the Corn Belt with scattered showers, but European and GFS models show rain in the second half of June.
The USDA will release crop progress this afternoon which will likely show a decline in the corn crop ratings. Last week’s rating showed 69% good to excellent, but it may drop by a few points due to lack of rain.
Brazilian corn remains significantly cheaper with their FOB corn prices in June below the US July futures. On the Bovespa exchange, July corn is trading at the equivalent of $4.58 a bushel.
Soybeans are trading slightly lower, while soy products are mixed. Soybean meal is about 1% higher, while soybean oil is 1% lower despite gains in crude oil.
The lack of rains recently has helped support soybeans as it has with corn, but more substantial rains will likely fall in the second half of this month, and soybeans are able to deal with the temporary dryness a bit better than corn.
Brazil is said to have harvested 5.7 billion bushels of soybeans, which would be the most on record for a single country. Additionally, they are said to have exported 15.1 mmt in May, which is 40% above last year.
According to the USDA, about 28% of US soybean production areas are in drought as of May 30.
All three wheat contracts are trading higher this morning despite the fact that both corn and soybeans turned around and are now trading lower on the day.
There is concern that the world wheat supply will be much tighter than anticipated, and traders will get an idea of that when the WASDE report is released this Friday.
The Crop Progress report today will give an indication if the recent rains in HRW wheat areas were enough to improve crop ratings. Last week’s ratings pegged US winter wheat’s good to excellent rating at 34%.
The wet weather has subsided for now in China’s wheat growing regions. However, the recent heavy rains could cause quality reductions, or even crop loss.
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