CORN
- Corn is trading lower this morning after two consecutive days of higher trade following a mostly neutral WASDE report. Both July and December corn are trading back above their 100-day moving averages.
- With the WASDE report out of the way, trade is now looking to weather which is expected to be hot and dry this month. Many fields need to dry out following last month’s excessive rains, but if heat and dryness continues into July and August, yields could be impacted.
- Yesterday morning, CONAB estimated the Brazilian corn crop at 114.1 mmt. Analysts were expecting a number closer to 112 mmt, but both guesses are well below the USDA’s recent guess of 122 mmt.
SOYBEANS
- Soybeans are trading lower this morning as well with pressure from both soybean meal and oil. Wednesday’s WASDE report did not offer much support, and soybeans have typically been planted at a good pace and in good conditions.
- The NOPA May US soybean crush is expected to come in at 178.352 million bushels. If realized, this would be up 5.3% from April’s crush of 169.436 mb. It would also be the largest May crush on record. With export demand poor, crush demand is helping support futures.
- Yesterday morning, CONAB estimated the Brazilian soybean crop at 147.354 mmt which compares to the USDA’s estimate on Wednesday of 153 mmt. At some point, these estimates will need to converge, and the USDA is likely a bit too high.
WHEAT
- All three classes of wheat are trading slightly lower this morning. Unlike corn and soybeans, the WASDE report was relatively friendly for wheat with lower world production, but that may have been priced in with the rally in May.
- While Russia and Ukraine have had their wheat production estimates lowered, Australia has finally caught a break with weather and has had its production estimates revised higher thanks to recent rainfall. Planted acreage in Australia has risen as well.
- In China, there is a drought ongoing and forecast to continue which could impact both the corn and wheat crops. Production is expected to fall particularly in northern China. This could force China to import more US grains.