In an overall mixed session across ag markets Wednesday, corn and wheat managed to recover some of the early week losses, with the latter finally finding some buying interest as KC and Chicago contracts again set new contract lows early in the session. Soybean futures were under pressure for most of the day, as weak energy markets induced more profit-taking in soybean oil futures. Crude oil prices, in particular, are down for the third straight session, with NYMEX futures working toward the lowest close for the front-month contract in over four years Wednesday. Equity markets were lower but recovered off daily lows. Early pressure can be attributed to U.S. GDP through the first quarter of 2025 reporting the first quarterly decline since 2022, driven primarily by a surge in imports as consumers and businesses attempt to work ahead of planned tariff policy.Â
WHEAT:
July Kansas City wheat traded 1 1/2 cents lower on Wednesday, closing at $5.29 1/2. July Chicago and Minneapolis contracts, on the other hand, were higher, led by Chicago which was up 5 1/4 cents. It was a disappointing day for July KC wheat as prices fell from early highs to close lower for the seventh time in the past ten sessions. July futures tied the lowest price for front-month KC futures since October of 2020.
Kansas City prices are unable to shake the recent improvement in conditions across hard red growing areas in the Western Plains, meanwhile soft red prices were able to hold onto gains despite closing well below daily highs. Meanwhile, Minneapolis spring wheat futures have extended their premium over Chicago and KC futures to the largest in about a year at approximately 65 cents. The current wheat market dynamics will lead to an interesting May WASDE report, which will balance improving conditions for winter wheat crops with lower estimated acreage across all wheat varieties based on the March 31 USDA estimates.
The DTN National HRW Index finished Tuesday at $4.52, while the DTN National HRS Index was at $5.63. Wednesday’s futures close and the implied Tuesday basis of 79 cents under the July for HRW, and 30 cents under the July for HRS, would indicate the indices for Wednesday afternoon to be near $4.50 and $5.66, respectively.
CORN:
July corn closed at $4.75 1/2 on Wednesday, up 5 1/4 cents. New-crop December corn was up 1 3/4 cents to $4.46 1/4. July futures caught themselves at support in the upper $4.60s but stalled out at the 50-day moving average near $4.78 1/2. New-crop December futures traded within 4 cents of the lowest price of 2025 thus far but managed to close higher for just the third positive session in the past ten tries.
The Energy Information Administration reported last week’s ethanol production averaged 1.04 million barrels per day (bpd) last week, an increase of 7,000 bpd as the seasonal slowdown thus far was very short-lived, with production showing increases the past two weeks after bottoming at 1.012 million bpd the week ended April 11. The production uptick comes as the Trump administration earlier this week granted an emergency fuel waiver which allows for the sale of E15 blends through the summer months. All this points to steady, strong demand for corn from the ethanol industry through the balance of the 2024-25 marketing year.
Traders will likely begin to look ahead to the May WASDE report, which will be an interesting look into the diverging situations between old-crop and new-crop corn. Old-crop demand may be revised higher again by the USDA, but assuming a steady acreage estimate of 95.3 million acres (the March 31 USDA estimate) and a trend line yield north of 180 bushels per acre, the resulting ending stocks for 2025-26 may keep pressure on prices. Of course, weather will always be the determining factor, and it’s worth keeping in mind that early WASDE estimates carry a fairly high degree of historical error (both ways) and must be taken with a grain of salt.
The DTN National Corn Index finished Tuesday at $4.37. Wednesday’s futures close and Tuesday’s implied corn basis of 33 cents under the July board would indicate the index on Wednesday afternoon to be near $4.42.
