TFM Midday Update 6-5-2024

CORN

Corn is trading near unchanged today after six consecutively lower closes and appears to have found some support at the 440 level in July and 460 level in December. Funds have been getting back into recently exited short positions and are estimated to have sold 41,500 contracts over the past five days.
Later today, the EIA will release its weekly petroleum report, and a reduction in ethanol production is expected following last week’s increase of over 5%.
In South America, weather is expected to intensify throughout the rest of the second crop corn development with warm temperatures forecast for Argentina, and hot and dry conditions for Brazil which could intensify the drought in the western Central region.

Soybeans are trading mixed to higher after a series of lower closes. Support today is coming from soybean meal while soybean oil trades unchanged to lower. Funds have likely been selling soybeans along with corn and are estimated to have sold 27,250 contracts over the past five days.
There have been some rumors that corn acres that have been too wet may switch to soybeans, but with prices of both corn and soybeans below many producers’ break evens, there is a chance that some will take Prevent Plant.
In Brazil, the soybean harvest is virtually wrapped up, but on Tuesday, reports came out that estimated around 2.5 million metric tons of soybeans may have been lost due to the flooding in Rio Grande do Sul. The USDA’s last estimate of 154 mmt is likely too high.

All three wheat classes are trading lower today with July Chicago wheat now down nearly a dollar from last week’s high as funds pile back into their short positions. Over the past five days, funds are estimated to have sold 30,000 contracts of wheat.
In Australia, consultancy ABARES has forecast the 24/25 winter wheat crop production at 51.3 mmt which would be a 10% increase year over year if realized. This would be due to an increase in acres and yields and would be their 6th largest winter wheat crop.
In Russia, two large consultancies have reduced their estimates for the Russian wheat crop to between 78 and 82 mmt which is well below the USDA’s recent estimate of 88 mmt. Temperatures are hotter than normal, reaching up to 100 degrees and it is dry as well. Russian cash values have increased as production estimates fall.

Amanda Brill