Written Commentary
CORN
Prices ranged from steady in spot July to up $.05 in new crop futures. July traded down to a $.05 discount to Dec-25, the lowest in 8 months. The collapse likely triggered by a drop in gulf basis levels, further evidence of global demand shifting to SA origin. Resistance for Dec-25 rests at its 50 day MA at $4.48. In the near term US weather is mostly favorable however extended forecasts showing the potential for heat and dryness building across the nation’s midsection the 2nd half of June. Ethanol production surged to 1,105 tbd, or 325 mil. gallons, up from 310 mil. the previous week and up 3% YOY. There was 110 mil. bu. of corn used in the production process, or 15.76 mil. bu. per day, above the 15.26 needed to reach the USDA forecast of 5.50 bil. Production was above the pace needed to reach the USDA forecast for the 1st time in 9 weeks.
SOYBEANS
Prices were steady to higher across the complex. Beans were $.03-$.05 with old crop gaining a bit on new crop, meal was up $2-$3 while oil was steady. Meal spreads firmed up while oil and beans were mixed. July-25 beans briefly traded above its 100 day MA for the first time in a week before settling back to its 50 day MA. July-25 oil rejected trade below $.46 yesterday. Overhead resistance rests at its 50 day MA at 48.05. July-25 meal came close but failed to close above its 50 day MA which would have been the first time in 4 months. Spot board crush margins increased $.02 to $1.23 ½ with bean oil PV trading back to its 2 month low at 44.1%. Rains the past 24 hours favored E. KS south into C. TX while also stretching NE across the Central Midwest. An active weather pattern will remain intact for at least the next week bringing widespread rains for the southern plains along with the central and ECB. Lighter totals for the NW third of the Midwest along with the N. Plains. Temperatures to remain in a cooler than normal pattern into early next week. Right now, a week or 2 of above normal temperatures is exactly what row crops need to fuel early development. Markets await to see if Pres. Trump and Chinese leader Xi will actually speak anytime soon. Today is the deadline the Trump Admin. has given our trading partners to provide their best offer on trade negotiations. Tariffs on steel and aluminum imports officially doubled to 50% overnight. Brazil is currently halfway thru the 28 day observation period following the outbreak of bird flu in a commercial flock.
WHEAT
Prices ranged from $.03-$.07 higher across the 3 classes today in choppy 2 sided trade. Inside day for July KC. July CGO held just below this week’s high at $5.49 ½. July-25 MGEX rebounded after an early challenge of its 100 day MA. Heavy rains for the US S. plains and Southern Midwest will slow crop development and delay harvest. Isolated flooding could result in disease issues as well. Pres. Trump also spoke with Russian Pres. Putin, where he reported told Trump he must respond to Ukraine’s recent attacks. Egypt’s new grain buying agency, Mostakbal Misr claims to have developed relations with both France and Romania to import wheat in order to diversify suppliers away from Russia and Ukraine and avoid geopolitical risk. Chinese drought continues to threaten their wheat production however so far hasn’t led to a bump in imports. The USDA is assuming record production, 142 mmt, and record yields, just over 6 mt per HA in their most recent WASDE report. Just a 5% reduction in yield would drop their production by over 7 mmt to 135 mmt.
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