Marketing
Afternoon Summary 5/26
Today's trading was marked by declines in corn and soybeans, while wheat futures showed mixed results, with Soft Wheat & Spring Wheat mostly unchanged, while Hard Wheat was the lone standout higher.
Friday's upcoming reports.
Acreage
Quarterly Grain Stocks
Personal Consumption Index
Corn:
July (ZCN24): $4.20 (-5 ½ cents)
September (ZCU24): $4.25 ¾ (-6 ¼ cents)
December (ZCZ24): $4.36 ½ (-6 ½ cents)
Corn futures faced pressure today due to a combination of steady ethanol production and higher-than-expected crude and gasoline stockpiles as reported by the EIA. Ethanol production remains stable, but stocks are at seasonal highs, contributing to weaker corn prices. Corn basis was mostly unchanged, with CIF values slightly up by 2 cents to +59 (N). The strength of the US dollar, particularly against the yen which hit a 38-year high, further impacted export competitiveness. Funds were noted sellers.
Soybeans:
July (ZSN24): $11.62 ¾ (-0 ½ cents)
August (ZSQ24): $11.42 ¼ (-3 ¼ cents)
November (ZSX24): $11.07 (-4 ½ cents)
Soybean futures dropped today, influenced by growing crude and gasoline stocks production which indirectly pressures soy oil prices. Global dynamics also played a role, with Brazilian exports remaining strong despite ongoing weather concerns.
Soft Wheat:
July (ZWN24): $5.41 ¼ (-0 ½ cents)
September (ZWU24): $5.60 ½ (unchanged)
December (ZWZ24): $5.83 (+0 ¼ cents)
Soft wheat futures showed mixed results, with nearby contracts declining slightly. Heavy rains in the Midwest have affected crop conditions but are expected to ease drought issues, potentially improving yields. The strength of the dollar continues to affect export competitiveness, and falling Black Sea wheat prices exert downward pressure on soft wheat futures.
Hard Wheat:
July (KEN24): $5.80 (+4 cents)
September (KEU24): $5.84 ½ (+3 cents)
HRW wheat futures gained today, supported by advanced harvest progress. The HRW wheat harvest is ahead of schedule, with 40% of the crop already harvested, which has helped to stabilize prices. The potential demand for US HRW wheat from Brazil is being closely watched, with rumors of 2-4 cargoes for late August/September delivery.
Spring Wheat:
July (MWN24): $5.96 (+0 ¼ cents)
September (MWU24): $6.04 (+0 ½ cents)
Spring wheat futures were mostly unchanged. Forecasts of additional rainfall in the Midwest could further alleviate drought conditions, supporting prices. Funds have shown a slight bullish shift in spring wheat positioning.
AG WEATHER
Extreme heat is forecasted for the South-Central US from July 2-5 and beyond, impacting crop conditions. A high-pressure ridge across the Southeast US is expected to pump upper air moisture northward into the Western Midwest, potentially bringing much-needed relief to dry areas. Heavy rains in South Dakota, Minnesota, and Iowa have caused significant infrastructure damage and crop flooding, particularly affecting corn and soybeans. South Central US corn pollination will be in full swing next week with extremely hot temperatures in the forecast. The high temps and nighttime lows will be crucial to monitor, Expected Rainfall for the Midwest dropped by 70% in the 11-15 day GFS forecast.
DOMESTIC DEVELOPMENTS
The US Dollar rose broadly against a basket of other currencies impacting export competitiveness. The Yen was noted to be at 38 year lows vs the dollar signaling the historic weakness.
The EIA report indicated steady ethanol production, but higher crude and gasoline stockpiles pressured corn prices as well. Road Freight was also softer, a likely explanation for weak diesel consumption, further affecting biofuel demand. Fund positioning was also noted today ahead of Friday’s Acreage and Quarterly Stocks report is adding to the pressure in row crops.
GLOBAL DEVELOPMENTS
Russian wheat export prices have continued to fall due to high early harvest yields, despite revised lower production estimates.
Brazilian soybean exports remain robust amid weather-related concerns.
In Europe, wheat exports have dropped year-over-year, reflecting lower availability.
Chinese corn prices have rallied to six-month highs as crop concerns following flooding in Southern China and drought and high heat across the Northern China Plains, sound the alarm domestically that there might not be enough to go around.
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