Corn and wheat were lower early Monday with soybeans trying to hold gains. Cattle were sharply higher, milk futures mixed.
Corn Back Testing Support
Despite higher weekly closes last week corn futures were lower Monday morning testing support.
Mike North of Ever.Ag says, “As you look at that old crop corn, still sitting, you know, five cents above where we bottomed out on the last dive, but really just kind of hovering north of that $4 support new crop finding it at $4.40,:"
However, he says the absence of news added to non-threatening weather is pressuring the market, in addition to ideas crop ratings could improve this afternoon.
“Yeah, we picked up a point last week and given the ongoing mild weather, precipitation and adequate heat, I wouldn’t be surprised by that,” he says.
Despite some severe weather over the weekend which damaged crops and dryness in the Western Corn Belt the market is still comfortable with the crop size.
“Obviously, with some of those really big rains, there’s threats of nitrate leaching and talk right now of maybe adding a little bit more to the side dress. But all in all, that rain makes grain commentary still holds true,” he adds.
Grains Hold Support Ahead of Reports?
He thinks the grain markets will be able to hold support ahead of the USDA reports at the end of the month.
North says, “It feels like the volatility has calmed down here over the course of the last week, and we’re kind of catching our breath ahead of the reports.”
Funds have stopped their massive liquidation and he thinks they will be more inclined to sit tight and wait for the numbers.
Report to Show More Corn Acres Than Expected?
So what kind of acreage shifts is North expecting in the Acreage Report on June 30? He says the surprise could be in more corn acres than expected.
He says, “I know a lot of people early as we came through the planting intentions report were thinking that we were going to shift a lot more towards soybeans. Anecdotally, we were not picking that up as we saw the chatter around increased input costs walk hand in hand
with higher corn prices. A lot of folks were still finding adequate and even increasing profitability in their corn numbers just because a lot of their inputs were already prepaid.”
So he thinks the numbers could be closer to the planting intentions than first thought, with maybe some minor regional adjustment based on weather.
China Confirmation
The soybean market is also trying to hold gains early Monday and holding key support.
North says, “Really kind of, you know, getting propped up there and $11.30 pretty meaningful number in the beans right now. And, you know, one of those longtime standing Fibonacci support lines that we find in soybeans.”
The soybeans are getting some help from a recovery in the bean oil market and continued hopes for China business.
Thursday brought confirmation of the first new crop sales of soybeans to China at just under 4.9 million bushels. Will they be in for more before harvest?
North says, “I believe it’s going to be more of a deferred type of experience. We’ve got great progress on harvest taking place in Argentina right now. They lead the world in terms of price affordability. They’re probably going to get the first look still. And so as we walk this forward. It very likely is going to come in the 11th hour as we close out the marketing year. But the fact that they made a purchase does present some hope.”
He is hopeful that sales can build into the new year however the market is working with some vague guidelines.
Iran Developments
The market is also watching Iran developments and the reopening of the Strait of Hormuz but has taken much of the war and energy market premium out of corn and even bean oil is well off its highs.
Still the push globally for biofuels will continue to support the market according to North.
“The biofuel story is actually still really strong. As you look at plant profitability and the aggregate on the ethanol side, we’re still hanging out at some of the highest margins that we’ve watched over the course of the last six months. But a falling corn price against what’s been a relatively firm energy complex, albeit crude oil 36% off of its peak. You know, bottom line is we are, you know, seeing some really strong margins there,” he adds.
Plus the expansion of renewable diesel is supportive for bean oil and soybean demand.
“And if you look at energy exports, we’ve been outperforming for the last six weeks and that bodes well, especially when laid against a domestic consumer that may not traveling as much,” he says.
Lower Gas Prices Support Demand for Meat and Dairy
North says lower gas prices will also help support better consumer demand for meat and dairy products as the national average gas price fell below $4.
“The average household at our peak was spending about an extra $40 per month just on fuel which you know back to your point about the dining out and you know the spend on food that $40 had to come from somewhere well over the course of the last couple weeks. We’re now back to a place where it only cost in the household about an extra $16 year over year in higher gas expenses so you know we’re starting to flatten that out,” he states.
That is supporting food service traffic but the data has been relatively disappointing.
“If you look at overall spend on both retail and food service last week’s numbers brought us 0.5 below where we were year over year and you know that’s disappointing. The more we can do to decrease energy prices the better we’ll be on that front and the more hopeful we can come with them spending money on that you know extra burger or you know maybe a steak for July 4th, or those extra slices of cheese for the burger,: he adds.
Cattle New Highs for the Move
Cattle futures made new highs for the move in both live and feeder cattle futures Monday morning.
The market was chasing higher cash at $258 to $260 from Friday and some bullish notes in the USDA Cattle on Feed Report which showed placements were down 9.7% from a year ago.
North says, “Cattle on feed numbers were expected to be a little higher for June 1 and fell a little bit short. Smaller placements kind of speaks to some of that tightness that still exists out there,” he says.
Milk Market Improvements Soon?
Milk markets were mixed Monday morning with July and August Class III futures prices slightly higher but just above the $16 per hundred weight mark.
Will those prices improve at all during the summer?
He says, “It’s going to be relatively difficult. We’ve got this stronger cattle market, and that has kept a lot of cows in the population that we wouldn’t otherwise keep. You know, we’re looking at a cow herd today of 9.65 million head, the biggest we’ve seen since the early 90s. And, you know, that is to reward the beef market, largely because we can sell these wet calves for $1,500, and that adds a lot of revenue back to the operation. The consequence of that, of course, is we make more milk.”
That has been pressuring the Class III market, with cheese prices back around $1.45.
“That makes us the cheapest price point in the world, and it helps our export story. But when we pivot back to talking about the domestic consumer and some of their lack of spend in the retail and food service space, You know, that only helps balance the story out. This big wall of milk is still out there,” he explains.
Milk production was up nearly 2% again last month in the USDA milk production report which is a huge headwind.
“And keep in mind, that’s on top of last year’s numbers that were growing at 4% to 5% during this period of time. So it’s, you know, it’s big growth on top of even bigger growth from last year. And that’s going to be the story quite likely through the balance of 2026, so long as this beef market stays intact.” he concludes.
