Grain Bulls Losing Momentum as Weather Improves and Demand Stories Fade

June is not starting out well. Prices fell again today to test long-term support as improved US forecasts added pressure to negative technical conditions. With no news on anything Iran related, crude oil traded on both sides of unchanged having limited impact on grain and soy trade while Chinese news was also absent on follow through trade deal purchases. The only true bull market on the board remains the US equity markets where another round of new all-time highs was made as company earnings in technology continue be impressively large. If demand news is missing, and Straits reopening talks remain slow, it will get harder for the non-threatening US weather forecast to not drive price direction.

News and Notes:

- Some welcome rain fell in NE and KS today with a normal rain and temperature forecast now extending into mid-June. The ECB needs warm sunshine while the WCB needs rain. Both should get relief in the next 7-10 days. Next week’s G/E should improve.

- The November daily bean chart is on Page 2 and shows today’s sharp early fall to trendline support (dotted purple line) that goes back to the mid-March lows and despite the 11 ¾ losses at the lows, prices did not fall below last week’s lows marking a series of higher weekly lows for all but one week for the last 10-weeks. The funds are still holding over 850 MBU of long positions, on a combination of the technical chart strength and expectation of improved Chinese demand after the breakthrough at last month’s trade meeting. Bean oil’s 60% rally since Dec has been a very large part of the bean support.

- Monday’s initial crop ratings were lower than expected but the ratings were pulled down by states where May weather was pretty tough. Corn is 93% planted, 76% emerged with an initial G/E rating of 67% (70% expected). Beans are 87% planted; 65% emerged with an initial G/E rating of 66% (68% expected). The notable ratings were Ohio (46% for corn and beans), Illinois (65% and 64%), Iowa (72% and 79%), Nebraska (58% and 61%) with Indiana (61% and 59%). Too much cold and rain in the ECB and a very dry winter in the WCB are chewing on the edges of the Corn Belt. While this is a good measure, initial ratings are a very poor predictor of final yield.

- Winter wheat crop ratings were just 26% as early harvest reached 5% while the spring wheat crop is 94% planted, 72% emerged but with a terrible 47% initial rating. Corn, bean, and both wheat ratings are below 2025 ratings for the same week below the 5YA.

- Despite the miserable US wheat conditions and yield cuts, wheat prices have fallen nearly 80 cents over the past 2 weeks. Prices were again lower today despite Australia’s ABARE lowering their wheat yield expectations to a crop 10 MMT below last year and the lowest in 3-years. There are also concerns that India’s summer monsoon may be a problem as strong El Nino years (like this year) negatively affect summer rainfall. Wheat should be getting to solid support.

- President Trump lowered tariffs on imported farm and heavy machinery from 25% to 15%, but if the machinery is 85% built with US aluminum and steel, the tariff drops to 5%. Lower prices on anything would be great, but fertilizer prices need to get the most immediate attention.

Until one of the three major factors picks up consistent direction momentum, it will be hard for the markets to break out or break down after the recent pullback. The growing season is starting pretty good but not great and may impact in-season decisions on high-cost fertilizer use and ultimately affect final yield. Corn is being priced like there will be a 2-3% loss from trend (4-5 BPA) unless weather turns dry as several major models are forecasting. There is long 3-month growing season ahead which has had far more outside noise than normal, so choppy and range bound looks to be the short-term action waiting on a definite announcement on trade or Iran.