The wheat markets experienced a lower week as the Canadian prairie region received beneficial rainfall to ease some very dry conditions.
Chart action was very poor in Minneapolis and Chicago. Support of $5.475 was breached in Minneapolis, as was $5.2575 in Chicago in June 19 trade. Kansas City support held at $4.5725. The Kansas City to Chicago spread has been historically wide at -65 cents in the July contract and -60 in the September contract.
Spring wheat conditions decreased 4% in the good to excellent category to 77%. Trade was expecting an increase of 1-2%. The crop is 21% rated fair and 2% poor to very poor. Spring wheat emergence is at 95% compared to 97% for the five-year average. The U.S. spring wheat crop is 2% headed compared to 12% for the five-year average. Barley conditions decreased 8% this week to 76% good to excellent showing that a couple 90 degree days with 50 mph winds did take some top-end yield potential off the small grains crops.
Winter wheat conditions remained unchanged from the previous week at 64% good to excellent, 27% fair and 9% poor to very poor. The crop is 89% headed compared to 95% for the five-year average. Winter wheat harvest is at 8% compared to 20% average.
The gold and silver markets saw over 3% gains in June 20 trade giving weakness to the U.S. dollar. The September dollar is now in the $96.15 area, with $96 serving as major support. The euro, ruble and Canadian dollar all witnessed decent gains on the week. The ruble has trended higher the entire month of June.
Weather model runs for the 11-15 day period showed wetter chances for the western Midwest, but slightly drier chances for the eastern Midwest. One to five day runs showed heavier rain chances for Minnesota and Iowa. Overall there is no break in the wet cycle for a majority of the Corn Belt.
Weekly export sales were very weak and below market expectations for the second consecutive week at just 188,000 metric tons (6.9 million bushels). There was a cancellation of 21,000 metric tons of hard red wheat this week. Total commitments are 233 million bushels for 2019-20, up 27% for the same timeframe last year.
For the week ending June 6, July contracts for Minneapolis wheat were down 25 cents at $5.3825, down 12 cents at $5.265 for Chicago wheat, and down 15.75 cents at $4.605 for Kansas City wheat.
Corn futures saw a choppy week giving up some gains after reaching new five-year highs on June 17. A favorable crop condition and planting report for futures gave this market some more upside potential as ratings stayed below 60% good to excellent.
The report has confirmed there will be a substantial amount of prevented planting acres this year. Some profit taking came into the market midweek as there will continue to be a lot of speculation about how the acres number will play out. Uncertainty with planted acres and yields will cause volatility this summer as there are a wide range of opinions on the matter. Poor weekly export numbers also dragged this market off the recent highs.
Options expired on June 21, which seems to put some pressure on the grain markets. There were a substantial amount of calls at the $4.40 and $4.50 strike prices and puts at the $4.40 strike price. December corn held $4.54 support, the old five-year high futures broke through a week ago. December corn was down 2.5 cents for the week ending June 20.
A warming eight-to-14-day forecast also caused pause in the markets. The recent weather hasn't done anything to get farmers excited about this year's crop as the cool and rainy spring continues. More rains are expected across the Midwest through the weekend of June 21 before the weather starts to look better.
Corn conditions were unchanged in the June 17 U.S. Department of Agriculture report at 59% good to excellent with trade expecting 59% to 61% good to excellent. The crop was rated 31% fair and 10% poor to very poor.
Crop planting progress as of June 16 was at 92% versus the five-year average of 100% complete and 100% last year at this time. This should be the last planting progress report of the year if the USDA does what it is supposed to do. This would also mean 7 million to 8 million acres of the original March planting intentions will not be planted. What is uncertain is if this survey includes acres that farmers had already given up on in the last couple weeks.
Corn emerged was at 79% versus the five-year average of 97% and 97% last year.
November futures saw its seven-day winning streak end this week but still kept the momentum going as soybean acres seem like they have to come in below 80 million acres this growing season.
Soybean futures saw some gains as rains have all but shut down farmers' planters for the year. The eastern Corn Belt was expected to and received the brunt of the rain this past week, and they are the states that least need it and still have soybean acres to plant. The extended forecasts still show average or slightly above average moisture, but not as extreme as we have seen this spring.
The upside was limited as warming six-to-10- and eight-to-14-day forecasts could give the late planted soybean plants a boost if rains are not too severe this weekend. November soybeans have gained 55 cent gains from the lows on June 10 but are still not a profitable level, especially with expected lower yields.
Does this mean the market needs to run over $10 in the next couple weeks to give incentive for farmers to plant acres into July? It seems at the current levels the market is telling farmers that they don't want extra acres as projected ending stocks are over a billion bushels for the first time in history. There may be some replant in the midst, but it would be hard to think many farmers will plant too far past the last plant date on ground yet to be seeded with prices that are still below $9.50 futures for new crop. There has also been talk some farmers in the "I" states and Ohio plan on planting acres into the beginning of July. The big question is, why plant so far past the last plant date at these price levels?
Soybeans planted for the week ending June 16 was 77% complete versus 96% last year and 93% for the five-year average. This means there were still 19.5 million acres of soybeans left to be planted in the U.S. as of June 16. This is based off the USDA's 84.6 million acres intended acreage estimate. Monday's USDA planting report seems to be causing more confusion than helping as the trade seems to be uncertain how USDA is counting planting progress and acres left to be planted.
The National Oilseed Processors Association's May soybean crush came in well below expectations and were down 5% from last year. May NOPA soybean oil stocks are near 14-year lows. May's crush was the second lowest of the 2018-19 marketing year so far, only beating the short month of February, while the average daily crush rate of 4.99 million bushels per day was the lowest since September 2017.
Soybeans broke through major resistance at $9.3125 on the weekly chart. On the daily charts, resistance is the 11-month high of $9.71 for November soybeans that was set on Dec. 12. First support is the bottom end of the gap left in November soybean futures at $8.58-$8.645 on May 25. The November contract low of $8.155 set on May 13 recovery is major support. November soybeans were up 17.5 cents for the week ending June 20.
For the week ending June 20, July canola futures were down .70 at $455.8 Canadian per metric ton. The July Canadian dollar was up .0054 at 0.7592. This brings the U.S. price to $15.70 per hundredweight.
• Velva, N.D., $15.39 per hundredweight, September at $14.94.
• Enderlin, N.D., $15.39 per hundredweight, September at $15.63.
• Hallock, Minn., $15.08 per hundredweight, September at $15.31.
• Fargo, N.D., $15.50 per hundredweight, July at $15.35.
Cash feed barley bids in Minneapolis were at $3.25, while malting barley received no quote. Berthold, N.D., bid is $2.75 and CHS Southwest New Salem, N.D., bid $3.
Cash bids for milling quality durum are $5 in Berthold and at $5.05 in Dickinson, N.D.
Cash sunflower bids in Fargo were at $17.60, with July bids at $17.60.
For the week ending June 20, soybean oil was up cents at $28.59 on the July contract.