Grain and oilseed markets again reversed impressively off overnight lows Wednesday to push higher by the close. Soybeans led the charge, finding strength on a couple different fronts. First, tight U.S. soybean oil stocks confirmed in Tuesday’s Fats and Oils report from USDA led to a gap higher in soybean oil futures. Markets furthered their gains when the Trump administration announced a trade deal had been reached with Vietnam, consistently a top 10 buyer of U.S. ag products. Meanwhile outside markets were mixed as investors watch for news on the budget bill progress in the House ahead of the July 4 goal for signing into law.
WHEAT:
September Kansas City wheat closed 11 cents higher on Wednesday to $5.42 1/4. September Chicago wheat was 15 cents higher while MIAX Minneapolis September spring wheat was 20 1/2 cents higher. The spring wheat market continues to be the bull of the wheat complex, driven by lower year-over-year acreage and expanding drought concerns for Montana, Idaho, and eastern Washington. Winter wheat prices were able to shake off harvest pressure on Wednesday, riding a wave of overarching grain market positivity to close higher by double digits as well.
In world wheat markets, Paris milling futures recovered from a rough past week of trade which sent prices back near 2025 lows. The intense heat wave may be worth keeping an eye on for adverse effects, although the majority of the wheat is mature at this point and harvest just around the corner. In Russia, the International Grains Council (IGC) reported winter wheat harvest is 1% complete as of the end of June, a slow start to harvest which supported export offers through the past week although Russian offers still remain among the least expensive in the world according to the weekly IGC report.
In wheat technicals, September KC futures were able to move back above support at $5.37 on Wednesday, which will be an important level to watch for a retest in coming sessions. The 20-day and 50-day moving averages just below $5.50 are the immediate bullish target for a further retracement of last week’s losses. The next round of support is currently seen near $4.27.
CORN:
September corn futures closed up 12 cents to $4.18. December futures were up 11 1/2 cents to $4.33 1/2. In overnight trade, September futures appeared primed to test the $4.00 mark again and traded as low as $4.02 before buyers stepped in to ultimately send prices up 16 cents off the low by the close. It could be we are seeing traders’ express satisfaction that the surge in recent bearish bias for the corn market is adequately priced in at this point.
Tuesday’s Grain Crushing’s report was neutral for the most part. Corn used for ethanol in May was 449.4 million bushels (mb), in line with expectations but about 1.3% less than in May 2024. In fact, monthly corn grind has fallen below the respective month from 2024 in four out of the past six months. Corn grind will need to average 473 mb per month over the final quarter of the marketing year to hit the USDA goal of 5.5 billion bushels (bb). At this point this seems like a stretch; I personally have lowered my estimate for 2024-25 corn crush to 5.45 bb. The Energy Information Administration reported Wednesday that last week’s ethanol production averaged 1.076 million barrels per day, the third straight weekly decline but still larger than the previous 4-year average for the same week.
In corn technicals, December futures rose to post their highest close since June 23. Prices once again were supported in the $4.15 to $4.20 range. The close back above the former contract low at $4.28 is a positive technical achievement. The short-term bullish objective should be to return prices to downtrend resistance in the upper $4.30s.
The DTN National Corn Index finished Tuesday at $3.92. Wednesday’s futures close and implied corn basis of 14 cents under the September board would indicate the index on Wednesday afternoon to be near $4.04.
