Written Commentary
CORN
Prices were $.10-$.12 lower while spreads were mixed ahead of tomorrow’s FND for the July-26 contract and of course the USDA stock/acreage updates. July-26 carved out a new contract low, while also dipping below $4.00 bu., the first time for the spot contract since Sept-25. For tomorrow’s USDA updates I see corn acres dipping to 94.75 mil. while my June 1st stocks est. is 5.425 bil. bu. The Ave. estimate in the Reuters survey shows acres at 95 mil. down from 95.3 in March with stocks at 5.408 bil. vs. 4.643 bil. YA. AgRural reports Brazil’s 2nd crop harvest has reached 22% as of late last week vs. 18% YA. Export inspections at 70 mil. bu. were above expectations and above the 59 mil. bu. needed per week to reach the USDA forecast. YTD inspections at 2.711 bil. are up 25% from YA vs. the USDA forecast of up 16%. Noted buyers were Mexico – 12 mil., Japan – 14 mil. while Korea, Taiwan and Colombia all took 5–6 mil. each. Friday’s CFTC data showed MM’s were net sellers of 23k contracts extending their short position out to 70k contracts while index funds sold off another 11k contracts.
SOYBEANS
Prices were sharply lower across the complex with beans down $.15-$.18, meal was $1-$2 lower while oil was down over $.02 lb. in the spot July-26 contract. Bean and meal spreads were mixed while oil spreads plunged. Support for July-26 soybeans is at this month’s low of $11.02 ½ while support for Nov-26 is at $11.21 ¾. July-26 oil challenged its 100-day MA at 68.82. Speculative traders came out of the weekend in a mood to sell. Limited demand interest from China combined with a cooler forecast in week 2 of the outlook weighed on commodity valuations. Crush margins fell $.11 to $3.21 ½ while bean oil PV slipped to 53.1%. Prices will continue to be sensitive to Chinese demand, or the lack thereof. US FOB offers at the Gulf are a slight premium over Brazilian offers for July/Aug-26, while slightly below Sept-26 forward. YTD inspections at 1.371 bil. are down 19% from YA in line with the USDA forecast. Mexico and Japan both took 4-5 mil. while China took only 2.4 mil. In addition, the USDA announced a flash sale of 136k mt (5 mil. bu.) of soybeans to an unknown buyer. Keep in mind, for China to buy 25 mmt ahead of Brazil’s harvest early next year they’ll need to buy nearly 1 mmt each week. Friday’s CFTC data showed MM’s were net sellers of 16k soybeans, 19k soybean oil and 9k soybean meal. The combined long position in the soybean complex is down to 149k contracts, the smallest in 4 months.
WHEAT
Prices generally ranged from $.05 to $.11 lower across the 3 classes, however July-26 MIAX settled nearly $.30 lower, likely due to get me out selling just ahead of tomorrow’s FND. CGO July-26 was down $.08 ¾ at $5.69 ½ while trading to a 4 ½ month low. KC July-26 was $.11 lower at $6.00 while trading to a 4-month low. MIAX July-26 settled $.29 ¾ lower at $5.45 ¾ bu. with the spot contract trading at a 5 ½ year low. I see US spring wheat acres rising to 9.75 mil. up from the 9.415 projected in March and just above the Reuters Ave. estimate at 9.5 mil. I’ve got 2025/26 ending stocks slipping 10 mil. to 925 mil., while the Reuters survey expected virtually no change. IKAR reports Russia’s export price for wheat ended last week at $231/mt, down $2 from the previous week. US export inspections at 13 mil. bu. were below expectations and the 15 mil. bu. needed per week to reach the USDA forecast. YTD inspections at 49 mil. bu. are up 1% from YA vs. the USDA forecast of down 17%.
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