Daily Market Cast: 6/4

Daily Commentary: Thursday, June 4, 2026

Transcript

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Hey everyone, this is Allison giving you today's Daily Green Market commentary for Thursday, June 4th. And it's important to remember here that the funds are not emotional, they're not evil, they're not sitting in a room plotting against farmers. They follow money, momentum, and opportunity. And historically, large speculative funds rarely build or onwind major positions in a single session. Big moves usually take time. And that matters because green markets have now faced fund selling for five consecutive sessions. So whether this marks the end of the liquidation or not remains to be seen, but it's difficult to argue that the funds have not been actively reducing risk. But that selling has not occurred without costs, favorable U.S. weather forecasts, weaker than expected export demand, and reports that a calf in Texas tested positive for New World Screwworm have all weighed on agricultural commodities. So the DZ definitely has the potential to further tighten U.S. cattle supplies if it spreads, which could ultimately reduce feed grain and protein demand. At the same time, we're seeing energies really failing at support here too, despite continued disruptions in the Middle East. Crude oil has backed away from recent highs. So all this put together does not mean that the funds are gone forever. Give them a reason and they will come back. And weather remains that biggest potential catalyst right now. Remember, we're still in early June and the crop has not pollinated, yield is not made. And one favorable forecast does not guarantee a record crop any more than one hot forecast creates a drought. And that is why I encourage producers to watch Nutrient Egg Solutions recent uh weather discussion with Eric Snodgrass. It does an excellent job of outlining the July heat and drought rest across portions of the core melt and reminds us that weather risk is still very much a part of the story. So I am including a link to that video. And clearly, that's the risk for the bears. Funds can sell first, ask questions later, but if weather becomes a legitimate threat, they can also turn around and reload just as quickly. But until then, producers need to stay disciplined. And in our opinion, it might be time to start looking at some buying strategies to get through July and August weather. On a side note, I will be joining uh Ryan Dennis from What the Futures podcast tomorrow for a line online uh webinar. So we'll discuss current market conditions, strategy. I'm on there with about three other people, um, just talking some strategy here going into summer. So if you're interested in joining, I am including a link to register as well. Again, that's for tomorrow morning. But corn was ugly again today. Favorable US weather, weaker export demand, fun liquidation all our weighing on the market. And once we saw support start failing, the selling only gained momentum. And it's been a steep fall. July corn traded as to a high of 487 and three quarters just a few weeks ago. And today we hit a low of 421 and a half. So that's a 60 cent break with no levels holding support, none. Um, so it seems like down we go from here. But today we did um settle uh the contract at 424 and a half. And new crops not giving producers much comfort either. December corn started the year by posting a contract low near 445. We finished today at 451 and three-quarters, just roughly a nickel off the contract low. So it doesn't give us much breathing room. Now, I understand it, the market is oversold, but oversold does not automatically mean the trade is done going lower. Funds can keep pressing these, um pressing their positions here until they're really given a reason stop. And right now, the reason still has to be weather, and that could take a week or two here before we really get into it. And soybeans were hit hard today, too, with double digit losses across the entire complex. Technically, the damage is adding up fast. Just five sessions ago, July soybeans were trading near $12. Today they printed a low of $11.20. So that's an 80 cent break in a hurry. November soybeans were also flirting with the $12 level before collapsing to a low of $11.34 today. So that move pushed new crop to a two-month low and left the charts looking pretty heavy. But the market's really just waiting for renewed Chinese interest. And so far, waiting is the key word. The US FOB premium to Brazil has actually narrowed just 20-30 cents for July and August, and is basically even with um September going forward. So that should help US competitiveness, but cheaper offers only matter if someone shows up to buy them. And even soybean oil uh struggle today with policy risk back into the confirm uh conversation. Um, the American Fuel Petrochemical Manufacturers Trade Group has filed a lawsuit uh challenging the EPA biofuel mandates, um, arguing they increase compliance costs and raise fuel prices. And if you add in Argentina's plan to lower soybean and soybean oil export taxes in the years ahead, and the long-term competition story is not going away. So for now, soybeans need China, weather or both, without one of those, the bears still have control. So July soybeans did settle out at 11.29 and a half, losing 24 and a half cents today. November ended 25 and 3 quarter cents lower at 11.41.5. And compared to corn and soybeans, wheat actually held together fairly well today. After leaving the grain complex lower for much of the past month, perhaps wheat is finally reaching a point where the bleeding begins to slow. That said, producers should not ignore what has happened here recently. Both winter and spring wheat crop conditions remain historically poor. Winter wheat ratings are at the lowest for this time of year on record, while spring wheat conditions came in well below trade expectations. And normally are those are two types of headlines that would support prices, but instead, wheat futures moved lower, and that was a red flag. Chicago, Kansas City, Minneapolis wheat have all either reached, approached, or exceeded a dollar losses from their spring highs. So that is a substantial amount of premium removed from the market here in just a short period of time. But the good news for the bulls is that much of the techno technical damage has already been done. The bad news is that traders remain comfortable betting on improving production outlooks. And if those forecasts vary, reallies may remain limited. If they don't, wheat may be the market most capable of reminding traders that crop conditions still matter. July Chicago wheat selled five and a half cents lower at 581 and three quarters. July KC ended three and three quarter cents lower at 620 and a quarter, and July Minneapolis finished at 621.5 and a quarter cents lower. And if you've been following our comments, we've consistently stated that the initial market reaction to a confirmed New World screw worm case in the US would likely be bearish. The bigger question was what happened after the shock wore off? Well, today's price action may have provided that answer. The cattle complex opened sharply lower as traders reacted to the first confirmed case. However, buyers stepped in almost immediately. Within minutes, the market reversed course and never looked back. And by the close, feeder cattle had rallied to new expanded daily limits of 10 set up $10.75 after trading nearly $7 lower during the first minute of the session. August feeders closed up $10.75 as well at $353.375, while October gained the same amount, finishing at $3.46.65. June Live Cattle added $2.55, closing at $249.175, and December gained $4.80, settling at $232.775. The biggest risk here moving forward may not be the disease itself, but consumer perception. The science remains clear, the beef supply is safe. In fact, Mexican beef imports are running more than 20% above Urugal levels, despite Mexico dealing with the New World Screwworm for over a year. So the challenge is making sure consumers hear the message before headlines create unnecessary fear and demand destruction. Meanwhile, USDA and Texas officials have already implemented quarantine zones, movement restrictions, animal inspections, fly trapping, sterile fly release programs designed to contain the outbreak outbreak. So the response has been swift and pretty aggressive. From a technical standpoint, today's lows are now critical support levels. Bears threw everything they had at this market this morning and failed. And that doesn't guarantee higher prices, but it certainly got the attention of the traders. Lean hogs were also pressured early as that new world screw worn came uh can affect any warm-blooded animal, hogs included. So one unique challenge though for swine industry is Texas's large feral hog population, which could complicate efforts to contain the pest if additional caches emerge. So online cattle, hogs were unable to fully recover from the opening sell-off. June lean hogs closed down 75 cents at 95.30 while August slipped 30 cents to 99.27.5. The market recovered substantially from the morning lowest, but the downside gap created at the open remains on the charts and will likely remain a focal point here for technical traders. So for now, cattle appear to have found buyers. Lean hogs are still looking for theirs, and it looks like we could sure use some across the green complex. I'm ready to start buying it. I just hope we can find some more traders and people who want to do it too. I know it takes balls, but I think we're gonna have to be doing something here in the next couple of weeks. So if you want to talk markets, give us a call. Um, again, feel free to reach out if you need anything. Have a good night. I'll talk to you again tomorrow.