Corn Lower on Demand Concerns

• July CBOT corn futures fell 20-1/2 cents this week to close at 615-1/4.
• New crop December 2023 CBOT corn futures lost 12 cents this week to close at 548.
• Buyers started quoting their cash bids off the July futures last week (or earlier) due to the growing inverted spread to the May. That spread reached 48 cents today as spot demand remains strong. There is growing concern about export demand going forward.
• Weekly corn export sales at 29 million bushels were below expectations of 30 – 50 million bushels.
• Brazil’s Safrinha corn crop has had plenty of moisture and the 6 to 10-day forecast calls for normal precipitation. Limited storage in Brazil could force more corn to the export market at harvest than has been in the past.
• Argentina’s Buenos Aires Grain Exchange kept its corn forecast at 36 million tons with harvest at 14.7% complete. The USDA is at 37 million tons.
• The International Grains Council (IGC) on Thursday raised its forecast for 2023/24 global corn production by six million tons to 1.208 billion tons.
• With less than 10% of the crop planted as of Monday, there is still time for a weather bounce.

Soybeans Sharply Lower as US Imports from Brazil

• July CBOT soybean futures dropped 18-1/4 cents this week to close at 1449.
• New crop November 2023 CBOT soybean futures shed 16-1/4 cents this week to close at 1285-1/4.
• At least two cargoes of Brazil soybeans are heading to the US. Soybean cash premiums in Brazil have dropped to historically low levels amid an ongoing record harvest.
• Soybeans out of Brazil port of Paranaguá were offered at $1.40 UNDER Chicago May futures. While soybeans out of the US Gulf were around 93 cents OVER.
• Soybean exports at 4 million bushels were below expectations of 10 – 20 million bushels.
• Argentina’s Buenos Aires Grain Exchange cut its soybean production estimate to 22.5 million tons from the previous week’s 25 million due to lower yields with harvest near 17% complete. The USDA’s last estimate was 27 million tons.
• Old crop soybeans nearing the 200-day moving average, holding here should support new crop values. The May/Nov spread is already over 2.00 and the widest it has been since the rally began in 2020 was 2.37 on the May 2020/Nov 2020 spread.

KC Futures Lead Lower on Better Weather Forecast

• July CBOT wheat futures lost 19-1/2 cents this week to close at 673.
• July KCBOT wheat futures closed 37-3/4 cents lower this week to close at 825-1/2.
• July MGEX spring wheat futures shed 27-1/2 cents today to close at 845-3/4.
• May options expired today.
• EU Milling wheat futures gapped lower yesterday when it was confirmed that Ukraine is still exporting wheat (there were reports of a stoppage/delay in inspections late last week).
• The Kansas City hard winter wheat contract gave up some of its premium to other wheats as a better, wetter forecast for the drought areas in the plains weighed on price.
• The IGC maintained its 2023/24 world wheat crop outlook at 787 million tons.

Spot Volume Supports Milk Prices

• Despite the second month and Q2 Class III contracts lowering this week, Q3 and Q4 for Class III, and Q2 through Q4 for Class IV were higher.
• Heavy trading in the spot markets seems to have supported milk prices and raised spot prices, cheese, butter, and powder all gained value, while whey traded sideways.
• Another positive fundamental on the markets this week was a higher Global Dairy Trade Index, ending a recent slide of negative events.
• Active culling of the dairy herd also seems supportive of keeping gains in milk production stable, where March milk production only grew 0.50%.