Written Commentary
CORN
Prices finished $.01-$.02 lower in choppy 2-sided trade while spreads were steady to easier. Nearby spreads carved out new lows ahead of FND early next week. Prices seemed to run out of steam after trading into new highs for the week. I see corn acres dipping to 94.75 mil. in next week’s USDA report 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. Yesterday’s drought monitor showed US corn acres in drought slipped another 1% to 22%, still above the 16% from YA. The BAGE reports Argentine corn harvest has reached 51% while holding their production forecast at 64 mmt, vs. the USDA est. of 61 MMT. Agroconsult raised their 2nd Brazil crop production forecast 3.7 mmt to 115.8 mmt. Their total production forecast at 144.1 mmt is well above the USDA est. of 138 mmt. Corn conditions in France fell 6% to 76% G/E. Still on the lookout for Chinese demand. As mentioned in yesterday’s closing comments, Dalian corn futures in China are trading $152/mt over US corn gulf prices, the widest in nearly 2 years. The end of June stocks/acreage report has leaned bearish for corn prices closing lower on report day the past 4 years and 71% of the years dating back to 2000.
SOYBEANS
Prices were mixed with beans closing within $.01 ½ of unchanged, meal was $1 lower while oil was steady to 50 higher following the late surge. Bean spreads weakened while product spreads firmed. July-26 and Nov-26 beans have held within yesterday’s range. Much above normal temperatures are expected to impact the nation’s midsection by early next week holding for the first 7-10 days of July. Updated extended forecasts will likely drive price action on Sunday night. Crush margins improved $.04 to $3.33 ½ with bean oil PV improving to 53.7%. Prices will continue to be sensitive to Chinese demand, or the lack thereof. US FOB offers at the Gulf are back to a slight premium over Brazilian offers for July/Aug-26, while slightly below Sept-26 forward. China’s first new crop purchase of 200k mt showed up in yesterday’s export sales report with another 529k to unknown. I look for US soybean acres to increase to 85.25 mil., up from the USDA March forecast of 84.7 mil. My June 1st stocks est. is 1.050 bil. bu. is just above the Ave. Reuters forecast at 1.046 bil. The BAGE reports Argentine soybean harvest has reached 98% while holding their production forecast at 50.1 mmt, in line with the USDA est. of 50 mmt. US soybean acres in drought slipped another 1% to 22%, still above the 12% from YA. The end of June stocks/acreage report has historically been more balanced for soybeans as it produced a higher close 14 times in the last 26 years dating back to 2000.
WHEAT
Prices range from $.10-$.13 lower across the 3 classes. CGO July-26 was down $.12 ¾ at $5.78 ¼, KC July-26 was $.09 ½ lower at $6.11, while MIAX July-26 was $.11 ¾ lower at $5.75 ½. Support for CGO July is at this month’s low of $5.71. KC July-26 reached a fresh 2 ½ month low while MIAX made a new contract low. I see US spring wheat acres bouncing to 9.75 mil. up from the 9.415 projected in March and just above the Reuters Ave. estimate at 9.5 mil. I see 2025/26 ending stocks slipping 10 mil. to 925 mil., while the Reuters survey expected virtually no change. Look for higher spring wheat ratings on Monday with rains across the N. plains this week. Winter wheat acres in drought fell 6% to 57% while spring wheat acres in drought rose 2% to 25%. The BAGE reports Argentine plantings have advanced to 66% while leaving their acreage forecast unchanged at 6.5 mil. HA. The wheat market has also leaned bearish for the end of June report. Since 2000 December CGO has closed higher 10 times, lower 15 while unchanged once.
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