TFM Morning Update 06-05-2024

CORN

Corn is trading slightly lower this morning in what would make a seventh consecutively lower close as funds continue to pile back into their short positions.
Yesterday, funds were estimated to have sold 1,500 contracts of corn. On Monday, it was estimated that they sold 9,000 contracts, and 10,000 contracts the Friday before. Summer weather will be the next important factor that trade will look to.
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 mixed this morning with the front months trading slightly higher while new crop is unchanged. Trade is likely expecting plenty of soybean supplies incoming. Soybean meal is trading higher while soybean oil is lower.
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.
Funds are estimated to have been adding to their short position for at least the past five days and are expected to have sold an additional 27,250 contracts in that time frame. This will be confirmed in Monday’s commitment of traders report.

Wheat is mixed this morning with Chicago and Minneapolis trading higher but KC slightly lower. Prices have reacted to US winter wheat conditions which are much better than last year, and a speedy planting progress for spring wheat. The market has temporarily shrugged off concerns over Russian weather.
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 India, their wheat output is expected to rise to 112.9 mmt which would compare to 110.6 mmt last year. In Addition, Russia is not revising their production much lower, so global weather concerns may be fading.

Amanda Brill