Daily Ag Direction 5/31/24
Good Morning!
The wheat market has been digesting a few days of bearish fundamentals as the HRW crop starts rolling in. Fund’s have sold off 6k contracts and rains forecast for the black sea have been enough to put a lid on further chart exploration above $7.50/bu. There are still above average rainfall forecasts for much of the HRW growing areas for the next 2 weeks so harvest progress will continue to churn. French soft wheat conditions dipped slightly along with E.U. soft wheat as a whole dropping to a 4-year low. It feels like more demand will need to show up in order for wheat prices to continue higher but we remain range-bound giving producers an opportunity to sell new-crop bushels at $7.00+/bu. as we continue to harvest. Drought in Mexico should continue to assist U.S. exports into the country. They imported 382k tons of U.S. corn with the remainder of the 810k tons exported going to Spain, Japan and China. Corn is seeing more fund selling and will need wheat to be strong to continue to maintain a floor. Bean prices fell below the 20-day moving average again even though there are still some technical reasons to be bullish. This market is cycling but dealing with a double-top that will require bullish fundamentals to break through. The lack of a manifestation of green diesel demand has market participants talking but it is still unclear how it could affect current prices in the long-term. U.S. exports are facing resistance from lower priced options on the world markets.
July ’24 KC Wheat +9 @ $7.18
July ’25 KC Wheat +10 @ $7.55
July Corn +3 @ $4.52
Dec Corn +2 @ $4.73
July Beans +10 @ $12.20
Nov Beans +6 @ $11.96
Sept Feeders -0.675 @ $260.000
Aug Live -0.375 @ $179.400
Please reach out to your CEA Risk Management Advisor if you have any questions. Have a great day!