This Week in Commodities 6-2-2023

Corn Pushes Higher

  • July CBOT corn futures added 5 cents this week to close at 609.
  • December CBOT corn futures added 6-3/4 cents this week to close at 541-1/4.
  • Chinese buyers were net purchasers of US corn for only the second week since mid-April after a weekly string of net cancellations. Net export sales for the 2023/24 marketing year were slightly above trade expectations.
  • With the release of the new US Drought Monitor this week corn producing areas experiencing drought increased by 8% to 34% overall. Also, of concern into the summer is growing subsoil moisture deficits in both Iowa and Illinois.
  • July corn futures had a strong close over the 50-day moving average for the first time since April 19th, and the strong price action could lead to additional buying support as we move into next week.
  • Spot Urea futures at the US Gulf traded below the $300/ton level this week for the first time since January of 2021.

Soybeans Mixed This Week

  • July CBOT soybean futures added 15-1/4 cents this week to close at 1352-1/2.
  • November CBOT soybean futures shed 5-3/4 cents this week to close at 1183-3/4.
  • US processors crushed 187 million bushels of soybean during April, this was more than 2 million bushels higher than trade expectations. This was over 6 million bushels higher than the April of 2022 crush number.
  • Soybean export sales were within the range of expectations but strong compared to recent weeks. Weekly sales ending May 25 were up 7% from the previous week and up 16% form the four-week average. Soybean meal sales were also strong up 19% from the previous week and up 62% from the four-week average.
  • Total nonfarm US payrolls increased by 339,000 jobs in May, this was well above the expectations of the market and spurred buying in both commodities and the stock market to end the week.
  • Expect market volatility to remain as US weather continues to drive market direction. The USDA will be releasing its June WASDE report next Friday, June 9. Following this report is historically the most volatile two-week stretch of the year for both the corn and soybean market.

Wheat Mixed This Week

  • July CBOT wheat futures added 3 cents this week to close at 619.
  • July KCBOT wheat futures shed 7 cents this week to close at 812-1/4.
  • July MGEX spring wheat futures shed 10-1/4 cents this week to close at 807-3/4.
  • Russia is inhibiting the Black Sea grain deal by blocking registration of all Ukrainian ports according to Reuters. Moscow is planning to limit registrations until all parties involved agree to unblock the transit of Russian ammonia.
  • Buying strength to end the week in spring wheat futures was nice to see with a close back above $8 on July and September futures. The window for a continued push higher may be limited as typical seasonal weakness from winter wheat harvest looms in the coming weeks.

June Starts Like May Ended

  • Milk futures continue down the path of least resistance lower with Class III leading the charge. July through October Class III contracts all fell greater than 30 cents on the day while Class IV was mixed with July and October unchanged and August and September down 10 and 9 cents, respectively.
  • The spot markets offered no help but explain why Class IV has not fallen as quickly as Class III with butter up slightly and powder unchanged while both cheese and whey fell to lower prices.
  • Regional cheese reports show hefty milk supplies despite a declining herd from March to April and minimal production growth in 2023 compared to last year.
  • Next week is quiet on fundamentals besides a Global Dairy Trade event on Tuesday which will look to end a streak of two lower auctions from May.



Keegan Madigan

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