Corn Market Update

? Prices:

• July Corn (CN): $4.34 3/4, down 9 3/4 cents; outside day lower
• December Corn (CZ): $4.35, down 8 cents; outside day lower
• July/September Spread (CN/CU): 15, down 1 cent

? Market Headlines:

• Corn futures quickly fell right back to the lower end of the recent trading range on Monday, as another round of expected gains in crop conditions and ongoing favorable weather forecasts led funds to continue selling throughout the day.

• Export inspection data this morning for the week ending June 12th showed corn inspections for the week at 1.673 MMT's, which was down just over 3% from last year. Cumulative inspections in the marketing year have reached 52.048 MMT's, which is up 28% from last year.

• Safrinha corn harvest pace has continued to slowly progress over the past week in Brazil; private firm AgRural on Monday said that as of last Thursday, just 5.2% of the crop had been harvested, compared to 21% through the same week last year.

• According to a poll of Reuters analysts, corn condition ratings in the G/EX category are expected to hold steady this afternoon at 71%.

Summary:

Not a good start to the week for bulls in the corn market, as Friday's gains were completely reversed in the old crop, while new crop values gave back even more than they got last week. There continues to be not a lot of fresh positive news, with wheat harvest and crop-friendly weather forecasts continuing to give fund traders reason to press the sell side, while the demand outlook through the rest of summer also isn't overly encouraging.

Soybean Market Update

? Prices:

• July Soybeans (SN): $10.69 3/4, unchanged
• November Soybeans (SX): $10.60 1/2, up 5 3/4 cents
• July Soybean Meal (MN): $283.70, down $8.20/ton
• July Soybean Oil (LN): 55.11, up the 4.5 cents/lb expanded trading limit
• July/August Spread (SN/SQ): -2, down 2 3/4 cents

? Market Headlines:

• Soybean oil continued to be the leader in the complex on Monday, as ongoing discussion regarding Friday's RVO announcement remained front and center.

• Weekly export inspections in the week ending June 12th totaled 216k MT's, which was down more than 60% from last week. Cumulative marketing year inspections are now seen at 45.416 MMT's, which is up 11% from last year.

• NOPA soybean crush data released earlier this morning for the month of May showed US bean crush in the month at 192.829 mil bu, which was up 1.4% from April and up 5% from May of last year; the figure was also a new record for the month. For reference, NOPA members account for roughly 95% of the total US soybean crush.

• NOPA data also showed soybean oil stocks as of the end of May at 1.373 bil lbs, which was down 10% from April and down more than 20% from May of last year.

• Soybean conditions in this afternoon's report are expected to also be unchanged on the week at 68% G/EX, while planting progress is seen advancing to 95%.

• Note, the complex will again see expanded trading limits tomorrow, Tuesday, as soybean oil again finished the day limit-up for the second consecutive session, even with expanded limits today.

Summary:

Soybean oil remained the main talking point in the market on Monday, as further buying based on Friday's RVO announcement was again able to lift soybean values into the green. The China front fell quiet over the weekend, with new tensions in the Middle East having pulled most of Trump's attention elsewhere in the short term. From the data side, the market largely shrugged off negative soybean crush numbers for the month of May which came in lower than expected.

? Prices:

• July Chicago Wheat (WN): $5.36 1/2, down 7 1/4 cents
• December Chicago Wheat (WZ): $5.73 3/4, down 6 3/4 cents
• July/September Spread WN/WU: -15 3/4, down 1/4 cent

? Market Headlines:

• Not a lot new in the wheat market for Monday, as the US harvest continues to get off to a slow start and prices continue to see early hedge-related pressure.

• Export inspection data for the week ending June 12th showed wheat inspections in the week at 389k MT's, which was up 20% from the week prior. Cumulative marketing year inspections in the season that began June 1 are now at 590k MT's, which is down 17% from last year.

• This afternoon's crop progress update is expected to show winter wheat harvest at 11% complete compared to 4% last week, while conditions are seen holding steady in the G/EX category at 54%. Spring wheat conditions are seen improving 1% to 54% in the G/EX category as well.

Summary:

The Chicago wheat market gave back about half of Friday's gains on Monday, as selling in the corn market was too much to overcome. Early harvest hedge pressure looks likely to continue limiting rallies in the short term, while improving forecasts for other global producers like Russia and China will likely also the limit upside. Unknown is what affect the broader conflict in the Middle East will have on wheat prices longer term, with this being one of the only even somewhat supportive factors currently in the market.

In Other News

• Livestock markets started the week higher:
• August live cattle: $215.55, up $3.10; inside day
• August feeder cattle: $310.22, up $3.80
• July lean hogs: $111.80, up $2.32; gap higher open and new contract highs at 112.05

• Crude oil futures also largely gave back what was gained on Friday, as newswires this afternoon reported that Iranian leaders said they were seeking to negotiate to de-escalate hostilities between themselves and Israel. However, newswires as of this afternoon were still reporting missile fire between the two sides, making it unclear exactly how likely these negotiations were to occur.

• Not a lot specifically new out of the G7 meeting in Canada on Monday, as leaders from the world's largest economies try and find solutions to wars both in Ukraine and the Middle East. Sources say the discussions were on a bumpy road from the get-go, with Trump telling the group removing Russia in 2014 was a mistake.

• Outside markets:
• Crude oil futures: down around $1.60/bbl; inside day lower for July
• Stock index futures: The Dow Jones index is up 320 points, the S&P500 index is up 50 points, and the NASDAQ is up 290 points
• US $ Index: down 30-40 points

Weather Outlook

? Short-term Forecast:

• Models for this week show the active weather pattern largely continuing through the Midwest, as thunderstorm activity is expected to remain common throughout the northern and central Corn Belt. Exact precip amounts/locations will be difficult to predict, but the EU model currently sees the best/heaviest rainfall totals in a fairly narrow band from KS/NE north and east through WI/MI and then into Canada.

• Temperature forecasts continue to see a warm-up in temperatures across the Midwest over the next week or so, with highs in the mid/upper 90's expected for parts of the Mississippi River valley by the end of this week/weekend. Meanwhile, the West Coast will see a few days of cooler weather the back of half of this week, but the heat is expected to return shortly thereafter.

? Extended Forecast:

• Week two precip maps from both the EU and GFS models trended wetter over the weekend, and have returned to much wetter than normal precip anomalies for most of the north-central Midwest and Corn Belt through the last week of June.

• Extended range temperature maps showed little to no change over the weekend, and continue to show well above normal temps throughout most of the country into the first part of July following a brief bout of cooler air in the west later this week.