By MATT PIKE
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GENERAL COMMENTS:
September corn closed up 12 cents and December corn was up 11 1/2 cents. August soybeans closed up 23 3/4 cents and November soybeans were up 20 3/4 cents. September KC wheat closed up 11 cents, September Chicago wheat was up 15 cents, September MIAX Minneapolis wheat was up 20 1/2 cents.
The U.S. Dollar Index is down 0.03 at 96.79. The Dow Jones Industrial Average is down 39.0 points at 44,768.0. August gold is up $13.10 at $3,362.90, September silver is up $0.34 at $36.74 and September copper is up $0.1090. August crude oil is up $1.95 at $67.40, August ultra-low sulfur diesel is up $0.0795, August RBOB gasoline is up $0.0207 and August natural gas is up $0.071.
CORN:
September corn futures closed up 12 cents to $4.18. December futures were up 11 1/2 cents to $4.33 1/2. In overnight trade, September futures appeared primed to test the $4.00 mark again and traded as low as $4.02 before buyers stepped in to ultimately send prices up 16 cents off the low by the close. It could be we are seeing traders' express satisfaction that the surge in recent bearish bias for the corn market is adequately priced in at this point.
Tuesday's Grain Crushing's report was neutral for the most part. Corn used for ethanol in May was 449.4 million bushels (mb), in line with expectations but about 1.3% less than in May 2024. In fact, monthly corn grind has fallen below the respective month from 2024 in four out of the past six months. Corn grind will need to average 473 mb per month over the final quarter of the marketing year to hit the USDA goal of 5.5 billion bushels (bb). At this point this seems like a stretch; I personally have lowered my estimate for 2024-25 corn crush to 5.45 bb. The Energy Information Administration reported Wednesday that last week's ethanol production averaged 1.076 million barrels per day, the third straight weekly decline but still larger than the previous 4-year average for the same week.
In corn technicals, December futures rose to post their highest close since June 23. Prices once again were supported in the $4.15 to $4.20 range. The close back above the former contract low at $4.28 is a positive technical achievement. The short-term bullish objective should be to return prices to downtrend resistance in the upper $4.30s.
The DTN National Corn Index finished Tuesday at $3.92. Wednesday's futures close and implied corn basis of 14 cents under the September board would indicate the index on Wednesday afternoon to be near $4.04.
SOYBEANS:
August soybeans surged 23 3/4 cents on Wednesday to $10.53 1/2. New-crop November soybeans followed suit, up 20 3/4 cents to $10.48. It was all around bullish session for the soybean complex as soybean oil futures started the session strong with a gap higher, pulling soybeans along for the ride but the market really took off midmorning with the announcement of the trade deal with Vietnam, which injected a new shot of trade optimism into the market.
Tuesday's Fats and Oils report was overall strong. USDA reported soybeans crushed in May totaled 203.68 mb, just slightly less than I was anticipating but still the strongest May on record at 6% higher than May 2024. The U.S. crush industry has only posted two months through the marketing year thus far at less than 200 mb, keeping the program on pace to hit the USDA goal of 2.420 bb of crush if not slightly more. I personally am penciling 2.425 bb for the marketing year. Also supportive were historically low soybean oil stocks for the end of May/beginning of June at 1.4 billion pounds, 19% less than in May 2024. Meanwhile meal stocks were 36% larger than in May 2024, adding to supply woes in that market. However, meal futures traded higher Wednesday as well amid a very technically oversold market in the short term as well as overwhelmingly positive influence from the soybean market.
In regard to the trade agreement with Vietnam, it is possible traders are viewing it more as a show of optimism that similar agreements will ultimately be reached with trading partners such as Japan and most importantly for soybeans, China. Vietnam is certainly no slouch in the soybean trade however, importing 38.75 mb of soybeans from the U.S. in 2024, good for ninth among buying countries.
In soybean technicals, November futures erupted through the major moving averages in the $10.35 to $10.40 range and have now reclaimed about 50% of last week's losses back to the June 18 high. $10.50 may be the next source of resistance for a sustained move higher. To the downside, a test of the 50-day moving average near $10.36 1/2 currently for support seems likely and will be an important technical test for gauging the staying power of the emerging price rally.
The DTN National Soybean Index finished Tuesday at $9.76. Wednesday's futures close and implied soybean basis of 54 cents under the August board would indicate the index on Wednesday afternoon to be near $10.00.
WHEAT:
September Kansas City wheat closed 11 cents higher on Wednesday to $5.42 1/4. September Chicago wheat was 15 cents higher while MIAX Minneapolis September spring wheat was 20 1/2 cents higher. The spring wheat market continues to be the bull of the wheat complex, driven by lower year-over-year acreage and expanding drought concerns for Montana, Idaho, and eastern Washington. Winter wheat prices were able to shake off harvest pressure on Wednesday, riding a wave of overarching grain market positivity to close higher by double digits as well.
In world wheat markets, Paris milling futures recovered from a rough past week of trade which sent prices back near 2025 lows. The intense heat wave may be worth keeping an eye on for adverse effects, although the majority of the wheat is mature at this point and harvest just around the corner. In Russia, the International Grains Council (IGC) reported winter wheat harvest is 1% complete as of the end of June, a slow start to harvest which supported export offers through the past week although Russian offers still remain among the least expensive in the world according to the weekly IGC report.
In wheat technicals, September KC futures were able to move back above support at $5.37 on Wednesday, which will be an important level to watch for a retest in coming sessions. The 20-day and 50-day moving averages just below $5.50 are the immediate bullish target for a further retracement of last week's losses. The next round of support is currently seen near $4.27.