? Corn Market Update

? Prices:

• July Corn (CN): $4.38 3/4, up 5 1/4 cents
• December Corn (CZ): $4.40, up 2 cents
• July/September Spread (CN/CU): 13 1/4, up 2 cents

? Market Headlines:

• Yesterday afternoon's crop progress update pegged the US corn crop at 71% in the G/EX category, which compares to 69% last week and 74% in the same week last year. P/VP conditions at 5% matched both last week and last year.

• Similar to early in the season last year, PA has the highest rated crop this week at 92% G/EX, while IA is rated 85%, CO is rated 78%, and MN is rated 77%. Planting this week has reached 97% complete, and 87% of the crop has emerged.

• July corn futures traded to their lowest level since last October early this morning at 4.29 1/4 before reversing course during the day session and finishing higher. The contract low, made last August, is at 4.21 3/4.

• Traders see Thursday's June WASDE report showing old crop ending stocks at 1.392 bil bu vs 1.415 bil in May, while new crop ending stocks are seen at 1.792 bil bu vs 1.800 bil in May. At the world level, stocks are seen slightly higher from last month at 278.8 MMT's on a possible upward adjustment of nearly 2 MMT's in Brazil.

Summary:

Not a lot specifically new in the corn market on Tuesday, as it seems traders correctly prepared for improving conditions in yesterday afternoon's crop update throughout the day yesterday. That the July contract was able to close higher on the day after making new lows for the move this morning is a short term positive technically, but we continue to be pessimistic of broader up moves due to the ongoing good weather forecasts and the start of Brazil's safrinha harvest that will effectively start to wind down the US 2024/25 export program at some point in the coming weeks/months.

? Soybean Market Update

? Prices:

• July Soybeans (SN): $10.57 3/4, up 1 3/4 cents
• November Soybeans (SX): $10.31 1/4, up 1/2 cent
• July/August Spread (SN/SQ): 8 1/4, unchanged

? Market Headlines:

• Soybean crop conditions also saw improvement in yesterday's update, with the USDA showing 68% of the crop in the G/EX category, compared to 67% last week and 72% in the same week last year. Also like corn, just 5% of the crop is rated P/VP, which is the same as last week and 1% higher than last year.

• At the state level, LA is leading the way with 81% of the crop rated G/EX, while IA is rated 80%, WI is rated 79% and MS is rated 78%. The report also showed planting this week at 90% complete, while emergence was seen at 75%.

• The EIA, in a Tuesday report, said they see US biodiesel and renewable diesel imports falling sharply year-over-year this year due to changes in the 45Z tax credit; in previous years, imported fuels were able to qualify for the $1/gallon blender's credit just like domestically produced fuels, but that is no longer the case with 45Z meaning imports will be economically disadvantaged.

• Traders see ending stocks in Thursday's June WASDE report at 351 mil bu in the old crop vs 350 mil last month, and see ending stocks at 298 mil bu in the new crop vs 295 mil last month. World stocks are seen increasing just marginally to 124.54 MMT's from 124.33 MMT's last month.

Summary:

Signs of positive rhetoric out of ongoing trade talks between the US and China in London on Tuesday kept the market above water, with it appearing that there was some measure of buying beans/selling wheat and buying beans/selling corn trade throughout the day today on the part of the funds. As long as meetings between the two sides remain ongoing, we would see price action ahead of Thursday's numbers remaining choppy, with there continuing to be considerable headline risk in the short term. Headline risk also exists on the biofuels/bean oil front, with it being nearly impossible to predict when headlines regarding 45Z or RVO blending mandates will pop up.

? Prices:

• July Chicago Wheat (WN): $5.34 1/2, down 7 1/2 cents
• December Chicago Wheat (WZ): $5.70 1/4, down 9 cents
• July/September Spread WN/WU: -14 1/4, up 3/4 cents

? Market Headlines:

• Winter wheat G/EX conditions in yesterday's report came in at 54%, which is the highest for this point in June since 2019. Spring wheat conditions were seen at 53% G/EX though, which is down from last year's 72%.

• Winter wheat harvest was seen advancing just 1% on the week to 4% complete, which compares to 11% last year and the five-year average of 7%. 82% of the spring wheat crop has emerged.

• Russia's largest grain producing region, Rostov, declared a state of agricultural emergency on Tuesday in some drought-hit areas, which allows farmers there to seek compensation for crop losses. Harvest is expected to begin in this area the next couple weeks, with estimates showing total production up around 5 million tons from last year at 135 MMT's.

Summary:

More ugly trade in the Chicago wheat market Tuesday, as sellers continued to press values on improving weather and the very early onset of US harvest. Seasonal price trends through the rest of the month and into July would argue for even lower values yet, with the July contract low made last month at 5.06 1/4 being the longer term downside objective.

? In Other News

• Livestock markets saw mixed trade throughout the day today after starting the session lower on news of immigration raids at a JBS meat packing plant in Omaha, NE. Spokespeople from JBS later said no raid occurred at their facility, but there was confirmation of ICE agents being present at other locations in the area.
• August live cattle: $218.20, down $1.05
• August feeder cattle: $313.15, up $1.50
• July lean hogs: $108.20, up $1.00

• Outside markets again saw quiet/mixed trading throughout the day today, as investors and traders have continued to take a 'wait-and-see' approach this week to coming inflation data due out over the next few days and also the Federal Reserve's policy meeting next week.
• Crude oil futures: down 40-50 cents/bbl.
• Stock index futures: The Dow Jones index is up 100 points, the S&P500 index is up 30 points, and the NASDAQ is up 120 points
• US $ Index: up 10 points

• Trade talks between the US and China extended through another day on Tuesday, with a Treasury spokesperson telling reporters that the two sides had paused for a break and would resume discussions at 8pm local time, meaning talks seemed set to run into the night. Trump and his team continue to report that things are "going well", but there remains little detail on the progress of the discussions otherwise.

?? Weather Outlook

? Short-term Forecast:

• Forecasts for the next few days continue to feature mostly dry conditions across the Midwest into the end of the week, with rains staying focused on the Gulf Coast and central TX.

• There will also be a line of storms working their way across the north-central Corn Belt later in the week, with parts of SD, MN, IA, WI, and MI expected to see anywhere from 0.5-2.5" of rain by the middle of the day on Saturday.

• Not much update throughout the day on temperatures, as there is still good model agreement on a gradual warm up for the eastern US the rest of this week and into next week, while the west stays mostly warmer than average.

? Extended Forecast:

• There is poor agreement both between the models and also between the individual model runs, but the EU's week two precip outlook sees widespread rainfall chances throughout the northern and eastern parts of the US, while keeping the west and southwest drier.

• The GFS, however, sees the wet conditions more limited to the eastern US and East Coast, while the north-central part of the country sees average to below average precip.

• The European model's AI forecast (pictured above) is trying to bring well above air temperatures back into most all of the US in the 10-15 day period, but our confidence in this is low as the models themselves still show similar outlooks to yesterday. It appears some degree of warming will occur across the Midwest into the end of the month, but to what extent is the big question.