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Ag Market View for June 6.23


The soybean complex closed mixed with soybeans $.03 – $.05 higher, meal was down $2 – $5, while oil was 100 – 165 higher.  Overnight news that a major dam was destroyed on the Dnipro River in Russian occupied Southern Ukraine triggered an early morning price surge.  Flooding from the dam collapse threatens thousands of homes, large areas of farmland and irrigation channels, grain storage facilities, and even threatens the safety of Europe’s largest nuclear plant. Spot soybean oil has reached its highest level in nearly 3 weeks.  Next resistance is the 50 day AM at 51.91 vs. today’s of 51.02.  A wire service report claims the EPA has scrapped plans to include EV’s in the biofuel blending mandate credit program.  This was expected to have added 2 bil. credits to the program, diluting their value for existing industry such as ethanol and advanced biodiesel.  Spot board crush margins improved $.05 today to $.80 bu.  Soybean oil product value increased to 39%, its best level in nearly 5 months.  The USDA announced the sale of 165k tons (6 mil. bu.) of old crop soybeans to Spain.  Soybean planting progress advanced to 91% complete, slightly below expectations however above YA and 5-year Ave. of 76%.  Emergence has reached 74%.  62% of the crop is rated G/E at the low end of expectations.  As of June 4th EU soybean imports have reached 12 mmt, down 11.5% from YA.     

Trading Candlestick Chart


Prices were higher with spot July-23 up $.10 ½ while deferred contracts were $.03 – $.04 better.  Resistance for July-23 is at last week’s high of $6.14.  Weather models continue to lean toward increased rain activity across the nation’s midsection in the 2nd half of June.  World Weather cautions that despite improvements, precipitation is not likely to return to normal leaving moisture deficits in several key areas.  While the NWS 7 day precip. map shows good coverage of .75 – 1.25” of rain across much of the southern Midwest, the midday GFS model lowered expected precipitation in central and eastern growing regions.  The continued back and forth with GFS weather model will continue to fuel the choppy volatile trade.  Corn planting are essentially complete at 96%, while emergence has reached 85% just above the 76% from YA and the 5-year Ave. of 77%.  Corn crop conditions slipped 5% to 64% G/E.  States seeing the biggest deterioration in G/E were IL down 19%, OH down 17%, while WI and IN both dropped 10%.  The corn CC index slipped to 81.8, below YA and the 5-year Ave., and the lowest since 2019.  EU corn imports as of June 4th have reached 24.6 mmt, up 60% from YA.  Dr. Michael Cordonnier lowered his US corn yield 1 bpa to 179 bpa with production slipping to 14.94 bil.  This compares to the May-23 USDA est. of 15.265 bil. and yield a record 181.5 bpa.  Dr. Cordonnier also increased his Brazilian corn production forecast by 3 mmt to 129 mmt, still below the May-23 USDA est. at 130 mmt.  The market will want to see an improved weather picture soon or risk sharply higher prices on added weather premium as speculative traders cover their remaining short positions.  Weak export demand along with the threat of higher stocks seems to be keeping rally attempts in check. 


Prices were mixed with Chicago closing $.02 – $.04 better, while MGEX and KC were $.02 – $.04 lower.  July-23 KC surged thru its 50 and 100 day MA resistance at $8.32 ½ before failing.  Chicago July-23 stopped shy of challenging its 50 day MA at $6.53 ¾.  ABARE projects 2023 Australian wheat production at 26.2 mmt, down 33% from last year’s record crop of 39 mmt.  After 3 consecutive years of record production the Australian weather bureau estimates a 70% of El Nino developing by July, which typically brings a warmer, drier weather pattern to the island nation.  The current USDA forecast is 29 mmt.  EU wheat exports as of June 4th have reached 28.9 mmt, up 11.4% from YA.  US WW ratings increased another 2% to 36% G/E.  The WW CC index improved for the 4th consecutive week to 74.8, well above the 72.1 YA.  My est. for WW production is 1.176 bil. bu. compared to the May-23 USDA est. of 1.130 bil.  Harvest is reported at 4% complete, in line with the historical average.  Spring wheat plantings have reached 93%, in line with the 5-year Ave.  64% of the crop is rated G/E, in line with expectations.  Egypt’s GASC reportedly bought 55k mt of Russian wheat for $244.50 /mt CF.

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Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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