Daily Market Cast: 6/1

Daily Commentary: Monday, June 1, 2026

Transcript

SPEAKER_00 0:00

Hey everyone, this is Els. I'm giving you today's Seedly Grain Market commentary for Monday, June 1st. Well, grains just can't seem to catch a break, even as outside markets turn supportive, grain traders just remain focused on favorable early season crop prospects and the lack of an immediate weather threat. So the latest geopolitical headlines would normally be supportive. We saw reports indicate that Iran has suspended negotiations and exchanges of documents through mediators in protest of Israel's expanded ground offensive in Lebanon. So the news sent crude oil sharply higher and pressured equities as hopes of a near-term peace agreement faded. Oil prices jumped more than 6% following the reports as traders just began adding geopolitical risk premium back into the market. So for now, however, the grain trade appears more interested in strong planting progress, expected favorable initial crop ratings, and the start of the seasonal weather market than necessarily another round of Middle East headlines. That doesn't mean crude oil no longer matters. The market's first story was crude oil and geopolitics, but the next chapter is likely going to be written by weather. So if energy markets continue recovering and inflation concerns do remain elevated, both could help at least keep a floor under grain prices here as we move deeper into June. July corn does remain the weaker contract from a technical standpoint here after breaking several support levels last week. The good news for the Bulls is that momentum indicators are becoming oversold and open interest has been declining. So that suggests some of the recent pressure may be coming from long liquidation rather than fresh selling coming in. December corn is telling a slightly different story. New crop futures tested major long-term support near the 200-day moving average of 468 today, but buyers stepped in and the contract managed to close above it. So that is an important technical victory here for the Bulls, at least for now. The bigger question is whether support can hold as this market transitions from planting season to weather season. And the first crop ratings are expected to be strong this afternoon. And seasonally, this is often a difficult time of year for corn prices. At the same time, exports do continue to run ahead of last year's pace, and inflation concerns are beginning to re-emerge again. So both of those could keep a floor under this market. We did see July corn close down two and three quarter cents at 444. December settled at 472.5, down two and a half cents. And technically, July soybeans remain range bound, and that's been a range they've been maintaining here since March. And that is surprising in some ways, especially given the lack of confirmed Chinese demand and exports still running behind last year. But this is a futures market and the trade is acting accordingly. The market sees potential here. Domestically, crush margins, soybean oil demand, and biofuel usage do continue to provide support. And abroad, the market is still holding on to the possibility of improved Chinese demand, lower tariffs, and additional trade commitments. Nothing has been fully confirmed yet, but soybeans are trading what could happen, not just what has happened. And that has kept July futures supported and November futures getting a bid here near recent highs. So July soybeans did settle six cents lower at 1180 and three quarters. November closed at 1188 and three quarters down a penny and a quarter. An improving weather forecast has sucked a lot of optimism out of the wheat market today. More importantly, it's not just a US story anymore. Crop conditions are improving apart across parts of Europe, the Black Sea region as well, and that's just reducing some of the production concerns that help support prices earlier this spring. So from a fundamental standpoint, that keeps the path of least resistance lower. But the market is becoming more comfortable with global wheat supplies, and until a new weather threat emerges, it's going to be difficult for the bulls to regain momentum. So the fundamental weakness is showing up in the charts. Technical trends do remain pointed lower with sellers continuing to control the market. Spring wheat was definitely hit the hardest today, posting double digit losses as traders removed additional weather premium from that market. So the next major support level for September Minneapolis wheat does sit near the 100-day moving average, around 660. So that level should attract attention from traders and producers alike. If support holds there, the market may be able to stabilize, but if it fails, the charts do suggest there could be room for another leg lower. So July Chicago wheat did settle one and three quarter cents lower today at 608 and three quarters. July KC ended at 647 down two and three quarter cents. July Minneapolis closed 11 and 3 quarter cents lower at 652. September ended at 675.513 cents lower. And the cattle complex opened higher and continued to build on those gains here throughout the session. By the close, most contracts posted solid triple-digit advances. Cash cattle traded Friday at 260, slightly below the previous week's levels, but still an exceptionally strong price. So year-to-date daily slaughter rates are running 9.2% below last year's pace, a much larger decline than many analysts anticipated. And while heavier carcass weights have added more beef production back into the system, the underlying story here remains unchanged. Cattle supplies are tight. Managed money did reduce some of their bullish exposure last week. Fun long positions in live cattle declined 7%, while feeder cattle long positions fell 35%. New daily trade limits also went into effect today, increasing volatility potential. Live cattle now have an $8.50 daily limit, while feeder cattle have $10.25 as a daily limit. So the increased limits mean larger price swings are possible, requiring more capital and risk management from market participants. Over the weekend, we did hear of a new case of New World Screwworm being reported in sheep, approximately 31 miles south of the U.S. border. The market appeared to view the news as supportive. However, if the pests were to be detected within the US, the implications could become more complicated. Quarantines and movement restrictions would likely be implemented in affected areas, reducing cattle marketings and potentially tightening available supplies even further. And while the situation bears monitoring, the immediate impact remains outside U.S. borders. So June cattle were 75 cents higher, closing at 249. December was up $2, closing at $231.70. August feeders were up $3.12.5, closing at $3.51.55. October was up $3.27.5, closing at $345.30. And lean hogs continued their steady downward trend. Funds aggressively reducing their long exposure last week, liquidating 61% of their bullish positions, and leaving them with fewer than 13,000 contracts net long. So if fund liquidation continues and traders begin establishing short positions here, additional downside pressure could develop. Cash hog prices do remain stuck in a relatively narrow range around 88 to 92, while June futures do continue to trade above 95. So at this point, the bears remain firmly in control and the downward trend in hog futures does remain intact. June hogs did close 82.5 cents lower at 95.025. August was off 75 cents, closing at 97.60. The Bears are eyeing that fall low in August hogs, which would come in under the $94 mark. So again, if you have any questions, as always, feel free to reach out. Otherwise, have a great night. We'll talk to you again tomorrow.