*** U.S. futures markets are closed Monday for Memorial Day. Trading in grains resumes at 7 p.m. CDT Monday. ***
CORN:
December corn ended up 1 3/4 cents at $4.88 1/4 Friday and was up 11 3/4 cents on the week, supported by ongoing planting concerns in the U.S. and general uncertainty about how many acres of corn will be planted in 2024. This week saw heavy rains and severe weather across Iowa on Tuesday with another storm front crossing the upper Midwest on Friday. The forecast is mostly wet for the Central and Eastern Corn Belt the next three days, continuing to pile on new planting challenges during the three-day weekend. Next week has a drier start after Memorial Day, but not for long with more rain expected Thursday and Friday. Away from the storms, there was room for planting to push forward this week, but the concern is that some pockets either won’t get planted this year or will switch to another crop. In central Brazil, the safrinha corn crop continues to suffer in its dry season, but does have a chance for limited rains this weekend. On Thursday, the International Grains Council (IGC) estimated Brazil’s corn production at 115.0 million metric tons (mmt) or 4.53 billion bushels (bb) in 2023-24, below USDA’s 122.0-mmt estimate and above Conab’s 111.6-mmt estimate. In Argentina, the Buenos Aires Grain Exchange said 28% of the corn crop was harvested and stuck to its 46.5 mmt (1.83 bb) estimate. The forecast remains favorably dry for harvest in Argentina the next seven days. Technically speaking, the trend remains up for December corn with important support near $4.75.
SOYBEANS:
November soybeans ended up 3 1/2 cents at $12.19 1/2 Friday, closing out the week up 16 1/4 cents and shy of the May high at $12.30 1/2. As with corn, soybean planting has been difficult the past few weeks, dodging storms and waiting for fields to dry out, but so far, planting has kept pace with the five-year average and I suspect that will be true again in Tuesday afternoon’s Crop Progress report. There is a chance soybean acres in the June 28 report could turn out a little higher than USDA’s early estimate of 86.5 million acres, but so far, traders aren’t showing much concern with prices near their highest level in four months. Soybean prices have received bullish support the past month from devastating flooding in southern Brazil, just as the final 10% of the crop was being harvested. In addition to crop loss at harvest, the soybean market was disrupted by the destruction of transportation infrastructure, storage facilities, port closures and shutdowns of crush operations. Emater, the rural extension service in Rio Grande do Sul, said the soybean harvest increased from 85% to 91%, but also said there were losses due to moldy grains and drier capacity is limited. Technically speaking, the trend in November soybeans is up, well above the 100-day average at $11.82.
WHEAT:
July KC Wheat finished up 10 1/2 cents at $7.21 1/4 Friday after the National Weather Service said Kansas and Oklahoma have moderate risks of storm activity Saturday. The July contract was up 59 1/2 cents on the week, its highest close since September 2023. Fundamentally speaking, the narrow case for higher KC wheat prices isn’t so strong as USDA is expecting 705 million bushels (mb) of HRW wheat production in 2024, up from 601 mb a year ago. HRW wheat exports are also down 30% in the current season and next year’s prospects may not be much better unless exports get a boost from crop failures elsewhere or possibly, get a boost from the ongoing drought in Mexico. In the bigger picture, all U.S. ending wheat supplies are estimated at 766 mb in 2024-25, a comfortable amount and the most in four years. SRW wheat is fundamentally the most attractive with USDA estimating an ending stocks-to-use ratio of 30% and only accounting for 126 mb of ending supplies. What the U.S. wheat market really needs is more exports and that is a difficult task if Russia is going to dominate exports again, the way it has the past two years. Freeze damage to Ukrainian and Russia crops earlier this month and now, a threat of dry weather for both countries is giving world wheat prices their current boost, U.S. wheat prices included. With concerns about dry crop conditions in the Black Sea region, the price trends remain up for the July contracts of all three U.S. wheats.
