By MATT PIKE
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GENERAL COMMENTS:
July corn closed down 6 cents and December corn was down 6 1/2 cents. July soybeans closed down 21 1/2 cents and November soybeans were down 18 1/2 cents. July KC wheat closed down 10 1/2 cents, July Chicago wheat was down 7 1/2 cents, July MIAX Minneapolis wheat was down 13 1/2 cents.
The U.S. Dollar Index is down 0.12 at 97.74. The Dow Jones Industrial Average is down 221.0 points at 43,203.0. August gold is up $10.40 at $3,344.30, July silver is up $0.42 at $36.15 and July copper is up $0.0350. August crude oil is up $0.65 at $65.02, August ultra-low sulfur diesel is up $0.0098, August RBOB gasoline is down $0.0035 and July natural gas is down $0.135.
CORN:
July corn traded lower yet again and deeper into contract lows, closing at $4.10 1/4, down 6 cents for Wednesday. December corn was also down 6 1/2 cents to $4.22 1/2, also trading to new contract lows for the session. Market bears kept the pressure on corn prices for Wednesday following an extremely bearish private estimate from Brazilian firm Agroconsult, which pegged safrinha corn production in 2025 at 123.3 mmt, and implies a total corn production of north of 150 mmt for the year. To say this would be bearish to the corn market is an understatement, as that estimate currently stands over 20 mmt larger than the most recent USDA estimate. There has long been speculation that the crop would ultimately grow from recent Conab and USDA estimates, but it was a definite shock to the market when the new Agroconsult figure made soundwaves on Tuesday afternoon. The main concern for the U.S. would be the added competition in the export market that would be likely with that level of supply. As of Wednesday morning, the International Grains Council reported U.S. FOB export prices still hold a $4/mt (10 cents per bushel) edge under Brazilian offers.
In their weekly Petroleum Status report, the Energy Information Administration reported ethanol production in the U.S. last week averaged 1.081 million barrels per day (bpd). This was down 28,000 bpd from the previous week but still seasonally strong, up 29,000 bpd from the previous 4-year average for the third week of June.
In corn technicals, December corn futures have become technically oversold following a 4-day skid which amounted to just over 20 cents of value loss. Following the break of support at $4.35 and subsequent taking out of the contract low, it is difficult to gauge support from here, but the board did find marginal buying interest at $4.21, perhaps setting up $4.20 and below as an area of support from profit-taking on short positions.
The DTN National Corn Index finished Tuesday at $3.95. Wednesday's futures close and implied corn basis of 21 cents under the July board would indicate the index on Wednesday afternoon to be near $3.89.
SOYBEANS:
July soybeans traded down 21 1/2 cents to $10.25 1/4. November soybeans were down 18 1/2 cents to $10.18 1/2. Sellers continued to drive soybean futures lower on Wednesday, with November futures now lower than prior to the bullish EPA announcement on June 13 and giving up the vast majority of the June rally in general. Price pressure intensified as the Wednesday session wore on, with the friendly weather outlook, particularly rainfall across Minnesota, Iowa, Illinois, and even Eastern Nebraska especially impactful to key soybean growing areas and further cementing the current trading thesis that less risk premium is needed in soybean prices for now.
In soybean technicals, November soybeans are nearing support in the $10.17 to $10.18 area going back to mid-April, a failure here would put $10.00 back into play as the immediate bearish target. Momentum is clearly in favor of the bears currently, with indicators suggesting there is potentially still some room for prices to drop in the short term.
The DTN National Soybean Index finished Tuesday at $9.89. Wednesday's futures close and implied soybean basis of 58 cents under the July board would indicate the index on Wednesday afternoon to be near $9.67.
WHEAT:
Wheat prices continued their retreat Wednesday, trading another 10 1/2 cents lower on July Kansas City futures, with Chicago lower as well and MIAX Minneapolis spring wheat futures leading the complex in losses, trading 13 1/2 cents lower amid the friendly weather outlook for spring-planted crops in general.
Wednesday's weekly report from the International Grains Council showed world prices mixed to lower for the most part over the past week, as Russian FOB prices stand out as among the lowest in the world per metric ton as the market braces for the bulk of that harvest in July. In Europe, Paris milling wheat futures have traded in accordance with U.S. markets, crashing from monthly highs back toward monthly lows over the course of the past four trading sessions. There has been some concern over recent days regarding high heat and dry conditions across Western Europe in the nearby forecasts, a situation that will be worth monitoring as winter wheat harvest nears. FranceAgriMer rated the country's soft wheat crop at 68% good to excellent in their most recent report.
For wheat technicals, July Kansas City futures traded to support in the low $5.20s, which held prices on dips in late May as well as mid-June. A failure here sets $5.00 and subsequent contract lows as the bearish target through winter wheat harvest. If support holds, then the 20-day moving average near $5.39 currently is the bullish target to stabilize prices in the short term.