DAILY GRAINS RECAP:
For the week:
July corn closed down 37 3/4 cents and December corn was down 32 1/2 cents. July soybeans closed down 10 cents and November soybeans were down 16 cents. September KC wheat closed down 3/4 cents, September Chicago wheat was down 2 1/4 cents and September Minneapolis wheat was down 4 1/4 cents.
CORN:
December corn fell 13 cents to $4.20 3/4 and was down 32 1/2 cents on the week, the lowest weekly close for December corn in over three years. Friday’s Acreage report from USDA estimated 91.5 million acres of corn plantings in 2024, more than expected, but down from 94.6 million a year ago. Iowa remained the king of corn acres with 13.10 million, the same as a year ago. Corn acres in Illinois came in at 10.9 million, down from 11.2 million acres a year ago. Keep in mind, weather has been hard on crop conditions in the upper Midwest this year and USDA said there were 3.4 million acres of corn not yet planted at the time of the June survey, more than are usually seen.
USDA also estimated June 1 corn stocks at 4.993 billion bushels (bb), up from 4.103 bb a year ago and surprisingly bearish, given the active level of demand at corn’s lower prices. The odd thing is Friday’s estimate implies 11.73 bb of corn has been used through three quarters of the 2023-24 season, not as much as we saw two and three seasons ago when corn supplies were tighter. Also, 3.03 bb or 61% of the corn was still held on farms on June 1. Technically speaking, December corn prices suffered technical damage again this week and the trend remains down.
SOYBEANS:
November soybeans ended down 3/4 cent at $11.04 Friday, finishing the week down 16 cents, a fifth consecutive weekly loss. Friday’s report from USDA estimated 86.1 million acres of soybean plantings in 2024, a little less than expected, but up from 83.6 million acres last year. USDA also said 12.8 million of the 86.1 million acres weren’t yet planted at the time of the survey, leaving the door open for a possible second survey in August. As is usually the case, Illinois’ 10.70 million acres topped all states with Iowa a close second at 9.90 million acres. USDA also said there were 970 million bushels (mb) of soybeans in storage as of June 1, a little more than expected and the most in four years by a small margin. Unlike corn, the majority of soybeans or 504 mb were held off-farm. One interesting demand item we continue to see is that soy product prices are holding firm, while soybean prices have been falling lower. This only serves to increase the crush margins, making domestic demand for soybeans even more attractive to processors. Based on August futures, the value of crushed soybeans exceeds the cost of cash soybeans by $1.91 a bushel, the widest margin so far this year. Technically speaking, the trend in November soybeans remains down with funds rewarded for staying net short.
WHEAT:
September KC wheat closed down 10 1/2 cents at $5.86 1/4 Friday and was down 3/4 cent on the week, a fifth consecutive weekly close by a slim amount. All the world’s wheat prices traded higher in late April and May as weather threats emerged in Europe and the Black Sea region and production estimates have been modestly lowered. However, in June, prices turned back toward their previous lows with a general expectation that wheat supplies will be a little less in 2024-25, but not uncomfortably tight. Although traders remain bearish, there seems to be more uncertainty in this year’s wheat crop conditions. On Friday, USDA estimated U.S. wheat plantings at 47.2 million acres, slightly less than expected. Winter wheat acres were estimated at 33.8 million, down from 36.7 million acres a year ago. Spring wheat plantings were estimated at 11.3 million acres, up slightly from 11.2 million last year. USDA also said June 1 wheat stocks totaled 702 mb, 20 mb higher than Dow Jones’ survey estimated. It is the highest ending wheat stocks in three years or we can also say it is the third lowest in 10 years. With a little less world wheat expected in 2024-25, it is interesting to see U.S. export sales off to a better early start. Thursday’s weekly report showed 224 mb of export sales on the books as of June 20, up 45% from a year ago at this time with active interest from Mexico and the Asian Pacific. Here in the U.S., the winter wheat harvest is making quick progress, but may encounter some rain in the week ahead. For spring wheat, crop conditions may be challenged by plenty of rain in the Dakotas and Minnesota, compared to drier conditions west of the Dakotas. There are also chances for frost this weekend in North Dakota and Minnesota, as well as in Canada’s western Prairies. After a harsh selloff in June, the price trends remain down for the September contracts of all three U.S. wheats.
LIVE CATTLE:
The live cattle complex did some water treading, time-passing holding period as largely the cash cattle market has yet to see any business develop. Yes, a few cattle sold live in western Nebraska at $198, which is $1.00 higher than last week’s weighted average; but the rest of the market isn’t sold on the idea of accepting packer offers just yet as they continue to hold out for more money. Bids of $188 live are currently offered in Kansas and Texas, and bids of $198 live and $312 dressed in Nebraska — but feedlot managers are sticking to their guns and holding out for more money. Asking prices are noted at $192 to $195 in the South and $315 plus in the North. To feedlots’ benefit, boxed beef prices are higher again, which could help incentivize packers to get busy in the cash market as beef prices are climbing and demand is strong. Live cattle contracts flip-flopped between higher and lower prices multiple times Friday as they desperately want to see some cash cattle trade develop but nothing sizeable has shaken out of the market yet.
FEEDER CATTLE:
The feeder cattle complex traded fully higher into Friday’s noon hour as the market was hopeful fed cash cattle prices will trade higher later Friday afternoon but is seeing ample support from its own cash market as just Thursday afternoon the CME Feeder Cattle Index closed at $259.04! The feeder cattle complex has chopped merely sideways this week as traders don’t want to get too far ahead of the cash market, even though fundamentally the market continues to see dynamite support.
LEAN HOGS:
The lean hog complex has already moved past Thursday’s neutral/somewhat bearish Quarterly Hogs and Pigs Report as the contracts are traded fully higher into Friday’s noon hour and ultimately ended up being the days winner on the meats trade.
