This Week in Commodities 06-09-2023

Corn Stalls on Hope of Future Rains

  • July corn futures shed 4-3/4 cents this week to close at 604-1/4.
  • December corn futures shed 10-3/4 cents this week to close at 530-1/2.
  • Weekend weather looks to bring moisture to areas of greatest need in the eastern Corn Belt. Rainfall totals and coverage will be closely monitored over the weekend and heavily influence market open on Sunday night.
  • 22/23 US corn ending stocks increased by 35 million bushels in today’s WASDE report as exports were estimated lower. Old Crop carryout at 1.452 billion bushels and New Crop 23/24 carryout coming in at 2.257 billion bushels was in line with pre-report estimates. Overall, the WASDE report was viewed as neutral for the corn market.
  • The Brazilian corn crop estimate was increased by 1 million tons, slightly higher than the trade was anticipating, while the Argentina corn estimate was lowered by 2 million tons, slightly less than what the trade was anticipating.
  • The US Drought Monitor this week showed an 11% increase in corn producing areas experiencing drought, this brought the total percentage to 45%. This is highest percentage of US corn areas experiencing drought for the first week of June in the past decade.

Soybeans Higher this Week as Soybean Oil Surges

  • July soybean futures added 34 cents this week to close at 1386-1/2.
  • November soybean futures added 20-1/2 cents this week to close at 1204-1/4.
  • US soybean ending stocks were increased to 350 mb today, which was higher than the average trade guess by 5 million bushels, but well within the range of pre-report estimates.
  • The USDA lowered Argentinian production to 25 million tons from their previous estimate of 27 million tons, but that is likely still too high given the Buenos Aires Grain Exchange estimate of just 22 million tons. Brazil’s soybean crop estimate was moved 1 million ton higher to a record crop of 156 million tons.
  • July soybean oil futures posted a strong follow through higher this week after a weekly reversal pattern last week. July Soybean Oil futures have closed higher in five of the first seven trading days to start the month of June.
  • China imported 12.02 million tons of soybeans in May, this is an all-time high for any month. Volumes are expected to be equal to even larger in June. Chinese soybean imports in the first five months of 2023 are running 11% ahead of last year’s volume for the same time period.

Wheat Mixed this Week – WASDE as Expected for Wheat

  • July CBOT wheat futures added 11-1/4 cents this week to close at 630-1/4.
  • July KCBOT wheat futures shed 32-1/2 cents this week to close at 779-3/4.
  • July MGEX spring wheat futures added 4 cents this week to close at 811-3/4.
  • The US 22/23 wheat carryout was unchanged at 598 million bushels. However, it was raised slightly for 23/24, from 556 million bushels in May to 562 million in June, due to a slight increase in overall production. As a whole, the WASDE report was viewed as neutral to the wheat market.
  • A weekend storm system across the heart of the US looks like it will almost entirely miss a vast majority of spring wheat production areas. After above normal winter precipitation, abnormal dryness has overtaken a good chunk of spring wheat areas according to the last two weeks of US Drought Monitor updates.
  • The Australian Agriculture Department is projecting a decline in wheat production of 30% due to the El Nino weather pattern. Weather in Europe has been hot and dry for the last few weeks, outlooks are not hinting towards improving weather conditions in the weeks to come. This helped Matif wheat futures surged higher this week.

About Face for Dairy Midweek

  • Spot cheese rallied three days in a row to start the week, bringing optimism back into the dairy market. However, cheese sellers used the rally as a selling opportunity and brought the block/barrel average back down over 9c by week’s end.
  • The GDT auction from this week saw anhydrous milk fat, butter, butter milk powder, and cheddar all move higher. Cheddar led the way, adding 7.40%.
  • Several Class III milk contracts hit new contract lows this week.
  • US dairy cow culling for the week ending May 27th, up 14.3% from the same week last year, strong culling rates can likely be attributed to record high cattle prices at the time.



Keegan Madigan

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