Corn
Price action: July corn futures climbed 3 cents to $4.42 1/2 and closed nearer session highs. That marked a 1 1/2 cent loss on the week.
5-day outlook: Old-crop corn futures led strength today, closing in the upper end of the recent sideways range. This week’s consolidation sideways was a good sign for bulls. While prices did make a fresh for-the-move low, sellers had a hard time breaking prices much below the May 13 low at $4.36 1/2 and were never able to close prices below that level. That is a sign of potential strength over the next week. Markets will be keyed in on Thursday’s WASDE, which is likely not going to have much of a change from May, especially a bearish adjustment. More on that in the 30-day outlook. The Goldman roll is picking up, meaning institutions and traders will be actively rolling positions from the July contract to deferred contracts over the course of the next week. That could bring additional volatility into old-crop/new-crop spreads next week, which have already been volatile.
30-day outlook: USDA will likely increase their old-crop export forecast and could choose to increase their ethanol use forecast as well. Both are pacing well above year ago and our pace analysis points to exports potentially being well above the current USDA forecast. Historically, total commitments (outstanding sales + accumulated exports) stall in May and June, but that has not been the case this year. Total commitments continue to charge higher, which renders a lot of pace analysis as difficult to discern, meaning using recent pace could actually underestimate exports the remainder of the crop year. We are a little more conservative on our export estimate than some, but are still 50 million bushels above USDA’s May forecast. Brazil was slow to begin export shipments for their recently harvested crop, but recently boats have begun to carry more corn out of Brazil, which will likely draw from U.S. demand.
90-day outlook: Only seven years since 1981 have not seen a summer rally in corn futures. A write-up regarding summer corn rallies can be found here. The most common time for a rally to start is June, though June maintains a bearish seasonal, which ultimately points to June being a common time for corn prices to bottom and post a rally that lasts into July. This year, the June Acreage and Grain Stocks reports will be a key element. The weakness of old-crop futures over the past couple months despite robust demand has been somewhat of a headscratcher. The stocks report should give insight into where all the bushels are coming from. Meanwhile, the acreage report will give key insight into just how many corn acres were planted, and just as important, how many corn acres needed to be planted at the time of the survey. That will give more insight into new-crop balance sheets. We continue to harbor suspicions that acres will end up coming in below the Prospective Plantings report.
What to do: Wait to get current with advised sales.
Hedgers: You should be 70% sold in the cash market on 2024-crop. You should have 20% of expected 2025-crop production forward sold for harvest delivery.
Cash-only marketers: You should be 70% sold on 2024-crop. You should have 20% of expected 2025-crop production forward sold for harvest delivery.
Soybeans
Price action: July soybeans rose 5 1/2 cents to $10.57 1/4 and marked a 15 1/2-cent gain on the week. July soymeal fell $1.50 to $295.70, and ended the week down 60 cents, while July soyoil rose 85 points to 47.50 cents, up 61 points for the week.
5-day outlook: Soybeans were able to notch gains every day this week, and ultimately ended the week above the 200-, 10-, 100-, 40- and 20-day moving averages, each trading around the $10.50 area. Soyoil gains supported the soy complex, which were bolstered by a bounce in crude outside of recent consolidation to a more than two-month high. However, some pause may transpire next week ahead of USDA’s June Crop Reports, due out Thursday, June 12. But this week’s price action indicates a near-term bottom has been forged, with bulls seemingly prepared to make a run at the mid-May high.
30-day outlook: USDA reported soybeans were 84% planted as of June 1, four points ahead of the five-year average. However, several areas in the eastern and southern Midwest continue to face delays, most notably in Ohio, Mississippi and Kentucky, which could mean increased soybean acres as producers in these areas have also struggled to plant corn acres. However, several may choose prevent-plant, which could increase production uncertainties as these acres are tabulated. However, weather will continue to be a focus as soybean plantings wind down across the Midwest and the growing season progresses.
World Weather Inc. maintains portions of Iowa, Nebraska and surrounding areas will have restricted soil moisture outside of some sporadic rainfall over the next ten days. Greater rain will be needed throughout the northern Plains and west-central and northwestern Corn and Soybean Belt. Meanwhile, plenty of rain will continue to fall in the Delta and lower Ohio River Valley, where some drying is desired.
90-day outlook: Demand for U.S. soybeans in the export market and domestic crush will continue to be a longer-term trade focus. Trade deals will be key, with several reportedly on the cusp of completion. While trade relations with China have certainly proven particularly volatile in recent months, presidents Trump and Xi Jinping have held discussions that have held an optimistic tone. Meanwhile, Japan, India and the European Union may also be close to finalizing trade details.
What to do: Get current with advised sales. Our next sales target is $11.00 in nearby futures.
Hedgers: You should be 65% priced in the cash market on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Cash-only marketers: You should be 65% priced on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Wheat
Price action: July soft red winter wheat futures closed up 9 1/4 cents at $5.54 3/4, near the daily high and closing at a six-week-high close. For the week, July SRW rose 20 3/4 cents. July HRW wheat futures gained 6 3/4 cents to $5.49 1/4, near the session high and closed at a five-week high close. On the week, July HRW gained 16 cents. Spring wheat futures closed a dime higher at $6.35 1/4, marking a 20 3/4 cent gain on the week.
5-day outlook: The technically bullish weekly high closes in July SRW and HRW wheat futures today set the stage for follow-through chart-based buying interest early next week. Both winter wheat markets are now trending higher on the daily bar charts. Next Monday’s weekly USDA crop progress reports will be closely scrutinized by traders, especially the condition of the U.S. spring wheat crop. Next Thursday’s monthly USDA supply and demand report will be a highlight for the wheat futures markets next week. The escalating Russia-Ukraine war is moving closer to the front burner of the wheat futures markets. Russian targeting of Ukrainian grain facilities is a growing concern amid the heavier air bombardments.
30-day outlook: The U.S. winter wheat harvest will be gaining steam in the coming weeks. World Weather Inc. today said Canada’s Prairies and northern Montana “are too dry and crop stress continues to rise as each day goes by. There is potential for rainfall in these areas during the second week of the forecast and that could bring some much needed relief.” Central parts of the U.S. Plains are trending too wet once again and the wet bias will last for another week. “Wet weather disease and lower protein levels are possible without a return to warmer and drier weather soon.” Nebraska, Colorado and northern Kansas crops will benefit from rain and warmer weather in the next 10 days. In overseas wheat regions, winter and spring crops in Germany, the U.K. and other areas in the North Sea region have improved with recent rain and the trend will continue as periodic rain and warm temperatures prevail. Portions of France still need rain and over time that need should be fulfilled. Russia’s Southern Region, eastern Ukraine and Kazakhstan are drying down again. Relief in parts of this region will be slow to come, although quite likely to begin late next week. Very good precipitation is expected in other winter and spring cereal areas across Russia; including the New Lands, said World Weather.
90-day outlook: The U.S. and China are set to resume trade talks after a “very positive” phone call between President Donald Trump and Chinese President Xi Jinping on Thursday. Progress on global trade issues, or lack thereof, will continue to be a major fundamental market factor for the grains in the coming months. If the past few months are any indicator, substantial progress on reducing global trade tensions may be hard to come by. If that’s the case, rallies in the wheat markets are likely to be squelched. The outlying surprise to grain market traders would be major success on lowering trade tensions—especially between the U.S. and China.
Hedgers: You are 100% sold in the cash market on 2024-crop production. You should be 20% forward sold for harvest delivery in 2025.
Cash-only marketers: You are 100% sold on 2024-crop production. You should be 20% forward sold for harvest delivery in 2025.
Cotton
Price action: July cotton rose 26 points to 65.62 cents, marking a weekly gain of 52 points.
5-day outlook: Cotton futures firmed amid short-covering but continued to trade within the range held since mid-May. Outside market forces could be attributed to today’s strength, with notable gains in crude oil and equities negating pressure from a firmer U.S. dollar. Cotton fundamentals remain uninspiring, which increases the reliance on outside markets for price direction. Next week’s USDA supply and demand update, combined with technical pressure, will likely make for persistent sideways trade, barring a catalyst, which could appear in the form of a trade deal.
30-day outlook: USDA reported cotton plantings were 66% complete as of June 1, three points behind the five-year average, with notable delays in Mississippi and Alabama. Continued rains in areas of Delta will likely prolong planting delays in areas. World Weather Inc. reports rains are expected in the northern Delta, exacerbating already saturated conditions. However, welcome moisture is expected to arrive in West Texas during the next ten days, with the forecaster stating most areas will be impacted at one time or another. The precip is expected to greatly improve crop and field conditions for planting and establishment.
90-day outlook: The U.S. and global economic landscape will be closely watched as the calendar year progresses. Uncertainty continues to sweep across the marketplace as demand unknowns hover amid potential tariff repercussions and the effects of lingering inflation and ultimately high interest rates. Low cotton prices have failed to ignite robust end-user demand, which elevates the importance of trade deals to be secured sooner than later.
What to do: Get current with advised sales.
Hedgers: You should be 35% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 35% sold on 2024-crop.