AM Comments June 6 2025
Good morning. Happy Friday. Grain markets are mostly lower to end the week as favorable weather continues to limit the upside. Corn, beans, and wheat are all down 1 to 3 cents this morning. Rain coverage was adequate for the Midwest this week and warm temps arrive again next week. The China/U.S. phone call enthusiasm quickly wore off as the details, once again, remain lacking. The July corn contract continues to get battered versus the deferreds, with the July/Sept corn spread trading into single digit inverses now. In non-grain news, President Trump and Elon Musk got into an public spat yesterday. The two are expected to have a phone call today. This will likely be the distraction for the media this weekend. With one more session to go, the weekly charts show July corn looking at a lower close, and the July beans and wheat trying to hold on to weekly gains. The meal market remains in its month and half long sideways pattern, while bean oil continues to wait for policy news. The cattle markets set new contract highs again yesterday. The USDA report is out next Thursday, June 12th.
Today's Reports: May payrolls report; Commitment of Traders'
- Through yesterday, July corn completed a 3-day up swing for a total gain of 1 1/4 cents. December corn was up 12 1/2 cents during that period. The sideways channel remains for July corn with support noted at yesterday's low near $4.33. The 20-day moving average is the first major resistance, which crosses near $4.48 today. July beans have bounced as well in that 3-day window, gaining 18 cents. The 20, 50, 100, and 200-day moving averages for July beans all cross within a 10-cent range of each other, which happens to be where current July prices are gravitating around.
- Heavy rains are expected to continue to hamper the southern half of the Midwest over the next few days. This will keep row crops well watered there, but it continues to raise concerns about winter wheat quality as harvest gets started. The northern half of the Midwest is expected to trend drier over the next few days. Sunshine and rising temps will be the main theme next week, which should be ideal for crops after this week's rains. The extended forecast is warmer through the middle of June, and calls for more normal rains. The prospects of a ridge developing and kicking out potentials of rain are still being discussed, but the short term favorable conditions trump that for now.
- World weather watchers are focused on dry conditions in the Canadian prairies, in Europe, and in the Black Sea. All of these areas have rain scheduled but confidence is relatively low with the coverages possibly not in the right spots. The forecasts for this areas are mostly catching the attention of the wheat market.
- The Census Bureau export data for April was released yesterday. April totals on beans were 2.18 MMT, down from the inspection data of 2.21 MMT. Corn census exports for April totaled 7.79 MMT, up from the inspection data of 7.42 MMT.
- The index roll for July contracts begins today. The index funds maintain long positions in the grains. The fund bylaws spell out that 20% of the long position gets rolled each day during the 5th through 9th business day in the month prior to expiration. This is typically done near the close of trading each day.
- The May nonfarm payrolls report will be released this morning. The estimates are for 125,000 jobs to be added in May. This number would be down from the 177,000 jobs added in April. The unemployment rate is expected to hold steady at 4.2%.
- The Buenos Aires Grain Exchange estimated bean harvest in the country at 89% complete, which is up 8% on the week. The group estimated corn harvest at 44% done, up 4% for the week. The winter wheat crop is 24% planted. Despite heavy rains to end the growing season, the Exchange noted in its weekly report that soybean yields are tracking higher than expected this season.
- Mantinquieria, a Brazil company that is the largest egg producer in South America, announced yesterday that it is starting greenfield projects in Colorado. The Brazilian company is 50% owned by JBS.