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Today crop progress will be released for corn, and we begin with a five year average target of 5% planted. Given rains in the Midwest, doubt that we have a number beyond that. As to a better correlation between price action and weather, we have wheat to look at which is lower this morning as rains appear ready to bring relief to dry areas in the southern plains. Wheat is lower this morning - corn is following. Longer range forecasts look for drier and warmer weather and farmers have been waiting for the chance to get started on their corn crop. As to the other corn story dryness continues in Brazil's Safrinha corn crop, and there is no relief in sight. Corn is slightly lower.
The soy complex is higher today with more buy bean / sell corn trade in an attempt to encourage more farmers to plant beans. The May bean contract hit a new high today at 9.23 3/4 after it setback but could not break the $9.00 level. Meal is higher with soyoil struggling. The uptrend in soyoil futures has been extremely strong, but all eyes were on the MPOB report. Instead of an all-out surprise, production was noted as better than expected with ending stocks a bit lower. While the bulls did not get the number they wanted, neither did the bear. May soyoil futures are a touch weaker but all eyes will be on key support points today which in this case is 3355 should we get there.
The April WASDE will be released tomorrow at 11:00 Chicago time, and export inspections today at 10:00.
There is a symbolic vote today in the afternoon as Brazil's congressional committee convenes to consider a recommendation to impeach President Dilma Rousseff. This vote is to be followed by a vote in Brazil's lower house of Congress in the following weeks. In reaction to the turmoil, the Brazilian currency firmed to new highs, a path that will shut down farmer selling activity.
At 10:00 export inspections were released as follows:
wheat 339,226 vs. 327,881 tons wk ago
corn 1,121,902 vs. 1,091,905 wk ago
bean: 386,786 vs. 226,828 wk ago
May beans found good buying activity on pullbacks, taking the flat-price up to new trading range highs even beyond trendline resistance which for the day was $9.27. The initial strength put a floor under soyoil, allowing it to trade to 3432 (May). But considering the record length in soyoil, funds were eying rallies as a way to get out of partial bullish positions. Strength in meal futures was a key feature as traders bought meal / sold soyoil unwinding that spread. Oilshare remained weak breaking 38% while crush values firmed to 59/60c/bu on meal's new -found strength. The Brazilian real continues to firm as more talk circulates that President Rousseff could be impeached. This morning the currency firmed to $3.52/USD, which is shutting off farmer selling. Certainly the US farmer is not interested at this point, either....particularly if they are out planting.
CLOSING COMMENTS
Today's weakness in grains / new highs in soy is part technical, part expectations for the USDA report tomorrow, and a whole lot of weather. Funds are short grains and not wrong. It is expected that corn plantings will come in 1-2% planted vs. the five year average of 5%. No big deal....yet. Wheat conditions were surprisingly resilient last week, but the impact of continuous weeks of dry weather may show up tomorrow creating a turn-around Tuesday into the report. And speaking of unwinding - get the feeling that the new highs in beans could be high enough for now, or getting awfully close. Soyoil could struggle with a chart that is beginning to look toppy and must now prove that lower key support can hold.
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