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Seasonal pressure sideswipes grain prices

Afternoon market recap: Planting and harvest progress in key countries push prices lower on Monday.

Ben Potter, Senior editor

June 17, 2024

5 Min Read
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At a Glance

  • Corn prices erode 1.25% to 1.5% lower, with soybeans down almost 2%
  • Most wheat contracts were slashed by 2.5% to 2.5% to start the week
  • Plus: Did crop quality trend lower last week?

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A selloff that slashed grain prices on Friday continued in earnest on Monday after corn, soybeans and wheat all faced sizable cuts following a round of technical selling largely based on seasonal factors. Corn prices faded almost 1.5% lower, while soybeans lost more than 1.75%. Wheat suffered a variable setback, with most contracts down between 2.5% and 3.5%.

Wetter weather is on the way to some parts of the Corn Belt later this week, with showers doling out 0.75” to 1.5” or more in a band stretching between Kansas and Wisconsin from Tuesday to Friday, per the latest 72-hour cumulative precipitation map from NOAA. Later on, NOAA’s new 8-to-14-day outlook predicts seasonally wet weather for most areas east of the Mississippi River between June 24 and June 30, with warmer-than-normal temperatures likely for the Midwest and Plains next week.

On Wall St., the Dow improved 230 points in afternoon trading to 38,819, and the S&P 500 found new record highs, as recent economic data is perceived as both strong and consistent. Energy futures also trended higher, with crude oil climbing more than 2% higher this afternoon to move back above $80 per barrel. Diesel trended 0.25% to 0.5% higher, while gasoline rose 1.75%. The U.S. Dollar firmed fractionally.

On Friday, commodity funds were net buyers of soymeal (+2,000) contracts but were net sellers of corn (-11,500), soybeans (-5,500), soyoil (-3,000) and CBOT wheat (-4,500).

Corn

Corn prices followed other grains lower on a round of technical selling, despite a solid round of export inspection data and the expectation that crop quality eased slightly lower this past week. July futures dropped 6.25 cents to $4.4375, with September futures down 7 cents to $4.50.

Corn basis bids eased a penny lower at an Illinois processor while climbing 7 cents higher at an Indiana ethanol plant and holding steady elsewhere across the central U.S. on Monday.

Corn export inspections reached 50.7 million bushels last week, which was slightly below the prior week’s volume of 52.8 million bushels. That was still toward the higher end of analyst estimates, which ranged between 35.4 million and 55.1 million bushels. Japan was the No. 1 destination, with 13.1 million bushels. Cumulative totals for the 2023/24 marketing year are still noticeably higher than last year’s pace so far, reaching 1.591 billion bushels.

Prior to Monday afternoon’s crop progress report from USDA, analysts expect the agency to trim corn quality ratings by a point, with 73% of the crop in good-to-excellent condition through June 16. Individual trade guesses ranged between 70% and 76%.

Brazil’s AgRural estimates that 21% of the country’s 2023/24 second corn crop has now been harvested through June 13, up from 10% in the prior week. That’s the fastest pace since AgRural began tracking these statistics in 2013 and is well above 2023’s pace of 5%. “Last week's warmer and drier weather accelerated the loss of moisture in the grains, giving a boost to the works, which were already well underway due to early planting and the shortening of the crop cycle in some areas,” according to the consultancy.

Corn settlements on Friday were for 494,729 contracts.

Soybeans

Soybean prices incurred double-digit losses on a round of technical selling largely spurred by planting progress in the U.S., and as the current Brazilian harvest wraps up. July and August futures each lost 21.75 cents to close at $11.58 and $11.4650, respectively.

The rest of the soy complex was mixed. July soymeal futures eroded more than 2% lower, while July soyoil futures found fractional gains.

Soybean basis bids were mostly steady across the central U.S. on Monday but did trend 5 cents higher an Indiana processor today.

Soybean export inspections moved moderately higher week-over-week, to 12.3 million bushels. That was also slightly on the higher end of trade guesses, which ranged between 7.3 million and 15.7 million bushels. Indonesia topped all destinations, with 3.1 million bushels. Cumulative totals for the 2023/24 marketing year are still tracking moderately below last year’s pace after reaching 1.502 billion bushels.

Ahead of Monday afternoon’s crop progress from USDA, analysts think the agency will show soybean plantings move from 87% completion a week ago up to 94% through Sunday. Analysts also expect to see the agency trim soybean quality ratings by a point, with 71% of the crop in good-to-excellent condition through June 16.

Earlier today, the National Oilseed Processors Association (NOPA) reported a better-than-expected soybean crushing volume in May that totaled 183.625 million bushels. That was better than most trade guesses, which averaged 178.352 million bushels. It was also 8.4% better than April’s volume and 3.2% above May 2023’s totals. NOPA also reported that soyoil stocks fell 5.9% month-over-month to 1.724 billion pounds through May 31.

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Soybean settlements on Friday were for 294,325 contracts.

Wheat

Wheat prices trended significantly lower as harvest progress triggered a round of technical selling. Harvest pace is expected to move from 12% completion a week ago up to 22% through June 13. July Chicago SRW futures stumbled 21.75 cents to $5.91, July Kansas City HRW futures lost 21.25 cents to $6.0625, and July MGEX spring wheat futures fell 16.25 cents to $6.3925.

Wheat export inspections made modest inroads last week after reaching 13.8 million bushels. That was also toward the higher end of analyst estimates, which ranged between 9.2 million and 16.5 million bushels. South Korea was the No. 1 destination, with 2.5 million bushels. Cumulative totals for the 2023/24 marketing year have started with moderate gains over last year’s pace so far, with 24.7 million bushels since June 1.

Prior to Monday afternoon’s USDA crop progress report, analysts anticipate that the agency will slightly lower its winter wheat quality ratings, with 46% of the crop in good-to-excellent condition through June 16. Spring wheat conditions were also expected to decline this past week, with 71% rated in good-to-excellent condition through Sunday.

Russian consultancy Sovecon estimates that the country’s wheat exports in June will reach 147.0 million bushels. If realized, that would be 9.1% below April’s volume and the lowest monthly tally since January. Russia is the world’s No. 1 wheat exporter.

CBOT wheat settlements on Friday were for 162,642 contracts.

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About the Author(s)

Ben Potter

Senior editor, Farm Futures

Senior Editor Ben Potter brings two decades of professional agricultural communications and journalism experience to Farm Futures. He began working in the industry in the highly specific world of southern row crop production. Since that time, he has expanded his knowledge to cover a broad range of topics relevant to agriculture, including agronomy, machinery, technology, business, marketing, politics and weather. He has won several writing awards from the American Agricultural Editors Association, most recently on two features about drones and farmers who operate distilleries as a side business. Ben is a graduate of the University of Missouri School of Journalism.

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