Crop Markets Higher Early Wednesday Following Tests of Chart Support

EARLY MORNING GLOBEX NET CHANGES: July corn is up 3 cents and July soybeans are up 1 3/4 cents. July KC wheat is up 2 1/2 cents, July Chicago wheat is up 1 1/2 cents, and July MIAX Minneapolis wheat is up 3 1/4 cents.

CME GLOBEX RECAP: U.S. Ag markets are mostly higher early Wednesday, led by corn futures which are attempting a second day of recovery after Monday’s plunge. Wheat markets will also attempt to snap a two-day losing streak to begin the week. U.S. equity markets have inched higher through the week thus far, and it will be interesting to see during the day session Wednesday how investors react to news of an accord being reached between the U.S. and China in London. The fine details of the agreement are unknown but are expected to include lifted restrictions on Chinese exports of rare earths an U.S. technology exports in return pending approval from Presidents Trump and Xi.

OUTSIDE MARKETS: Previous closes Tuesday showed the Dow Jones Industrial Average up 105.11 to 42,866.87 and the S&P 500 Index up 32.93 at 6,038.81. The 10-Year Treasury yield ended at 4.47%. Early Wednesday, June Dow Jones futures are down 82 points. European markets are mixed with the spot futures of the London FTSE 100 trading down 0.10%, spot futures of Germany’s DAX trading up 0.03% and spot futures of France’s CAC Index trading up 0.30%. Asian markets are higher with Japan’s Nikkei 225 index up 0.55% and China’s Shanghai Composite Index up 0.52%.

The June euro is up $0.0014 at $1.1439. The June U.S. Dollar Index is down 0.08 at 99.0. The September 30-year T-bond is down 13/32nds, while August gold is up $12.40 at $3,355.80 and July crude oil is up $0.98 at $65.96. On China’s Dalian exchange, July corn was up 0.3%, September soybeans were up 0.3%, September soybean meal was up 0.7% and September soybean oil was down 0.6%.

MORE COMMODITY-SPECIFIC COMMENTS

CORN:

Corn futures are posting modest gains early Wednesday, attempting a second day recovery of Monday’s losses. The U.S. corn crop gained in condition ratings from the USDA over the past week to 71% good to excellent meanwhile the two-week forecast continues to add rain chances for most of the U.S. Corn Belt. The latest forecasts would extend the crop to June 25 with minimal issues thus far through planting or growing. Seasonal forecasts for July and August are still calling for hot and dry weather overall for much of the U.S. Midwest. For Wednesday reports, the Energy Information Administration will release its weekly Petroleum Status Report which will include last week’s average daily ethanol production. Production is expected to fall between 1.072 and 1.104 million barrels per day (mbpd), which would be down from the previous week’s average production of 1.105 mbpd.

SOYBEANS:

Soybean futures are slightly higher early Wednesday as well. Soybean trade for the week has been very muted with just a 10 1/4 cent range thus far for the two sessions and change. It will be interesting to see if any trade optimism regarding the U.S. and China trade truce is reflected in the market when day traders arrive to their desks at 8:30 a.m. CDT. Thursday’s WASDE report is expected to be a quiet event for soybeans, as the USDA is expected to fine tune South American production estimates as harvest winds to a close in Argentina. There may be a chance to see further reductions to 2024-25 ending stocks in the U.S. as well, but currently no usage category jumps out as shockingly underestimated by the USDA, so I wouldn’t be surprised to see the government hold steady this month.

WHEAT:

Wheat futures are higher Wednesday morning, as markets attempt to snap a two-day loss streak which added up to 22 cents out of the July Kansas City contract in two sessions. July KC prices also slipped below the 20-day moving average near $5.33 1/4, a mark that supported prices when last breached in late May, although the level has already rejected prices early Wednesday. Private analytics firm SovEcon raised their estimate for Russian wheat production to 82.8 million metric tons, an estimate that has grown over the past few months as conditions have improved. Meanwhile improvements to U.S. wheat crop conditions over the past two weeks have also pressured prices. Meanwhile, Russia has continued its attacks on Ukraine over the past several days in response to the previous week’s Ukrainian drone attack on Russia. BBC reported Tuesday that the Ukraine port city of Odessa was targeted, but there has been no further reports of any damage to export infrastructure, and wheat markets have shown little further concern for the ongoing turmoil in the Black Sea region this week following last week’s price boost.

Rhett Montgomery can be reached at Rhett.Montgomery@dtn.com 

Follow Rhett on X: @R_D_Montgomery