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Grain Comments: 06-17-2024

Good morning.

Ag futures are lower to sharply lower to start the new holiday shortened week, as selling pressure from Friday has spilled over into Monday. Wheat futures are the downside leader to start, as markets see harvest pressure from the arriving US crop. Corn and soybeans are in two, with technical selling at the 10-day moving average in both markets noted through the overnight trade. Corn futures are 4-5 cents lower, soybean futures are 10-15 cents lower, and the Chicago wheat market is down 14-18 cents. Products are lower, soybean meal is down $3-4/ton, and soybean oil is down around 40 points. Outside markets are mixed/quiet, crude oil futures are up 40 cents/bbl, the Dow Jones index is down 50 points, and the US$ index is up 2 points.

Friday afternoon’s CFTC report showed for the week ending June 11th, managed money traders were buyers of 426 corn contracts, sellers of 16,139 soybean contracts, and sellers of 13,432 contracts of Chicago wheat.

This makes these traders now net-short 212,279 contracts of corn, net-short 75,880 contracts of soybeans, and net-short 45,116 contracts of Chicago wheat.

In soy products, funds were sellers of 18,155 contracts of soybean oil, and were also sellers of 7,791 contracts of soybean meal. Funds are now net-short 75,844 contracts of soybean oil and are net-long 92,907 contracts of soybean meal.

This morning’s NOPA crush report for the month of May is expected to show soybeans crushed at 178.352 mil bu’s. This would be up 5.3% from April, and up 0.2% from May 2023. Trade estimates soybean oil stocks at 1.775 bil lbs., down 5.2% from last year.

Other main point of interest Monday will be this afternoon’s crop progress reports, which are expected to show some minor deterioration in g/ex ratings due to recent wet weather in the North/Northwest, and heat in the East.

Next major point of interest will be the June quarterly grain stocks and planted acreage updates, which will be released on June 28th. There continues to be sizeable debate on the final acreage mix between corn and soybeans.

US federally inspected pork production in the week ending June 15th was down 1.2% from last week at 515 mil lbs. Beef production was unchanged from last week at 522 mil lbs. YTD pork production is up 0.8%, and YTD beef production is down 1.6%.

Financial markets this week will be tuned in to a host of central bank decisions around the world, with the UK, Australia, and Brazil all set to make interest rate decisions in the coming days; China announced no change in rates for the tenth straight month on Monday.

This comes following more hawkish commentary from the US Fed last week, as they also again left rates unchanged for another month. Inflation data has leaned more friendly of late, but officials are still reluctant to cut rates too soon.

Otherwise, Monday’s slate of data looks to be relatively quiet in the equity’s world. A duo of Fed speakers is set to give comments, while the private earnings calendar does not have much of interest to start the week.

Best rains over the weekend were seen in the Western/Northern areas of the Corn Belt, while the East was left relatively short-changed. Satellite data shows totals of 1-3″ for wide swaths of NE/the Dakotas into IA, MN and WI. There are local flooding concerns in parts of MN/WI after heavy rains last week.

Forecasts for this week are mostly unchanged, with a ridge of high pressure set to impact the Eastern half of the US into the weekend. High temps will stretch into the mid/upper 90’s, with overnight lows in the low/mid 70’s through next Sunday.

Areas in the North/Northwest that received rain over the weekend also see the best chances of rainfall this week, as ridge-riding thunderstorms provide near daily chances at moisture over the next 7 days.

Week-two forecasts have trended wetter in the South/Southeast, while trending dryer West of the Rocky Mountains, as activity in the Gulf is seen picking up. And temps are seen staying above average for all but the far Northwest into the end of June.

Forecasts continue to fluctuate on precipitation for Russian wheat areas. The EU model overnight has moisture slightly farther West than yesterday’s runs, while the GFS has trended wetter to the East. Temps continue to be seen well above average in the 10-day period.

Both the EU and the GFS trended dryer for Russian wheat areas over the weekend in the next 10 days, while temps remain well above average. Temps also stay hot in Northern China, while the Southern/Eastern part of the country see monsoonal rains.

And there was again not much update for South America overnight. Argentina saw scattered showers over the weekend, while flood-affected areas in the North and into Southern Brazil/Uruguay again received unwanted rainfall. Like China and Russia, temps in South America stay well above average for another 10 days.

Have a great day.


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