CBOT May 11
Lastchanges
SMK364.4+4
SMN362+2.3
SMQ360.5+2.2
SMU359.3+1.9
SMV357.5+2.2
SMZ357.7+2.1
SMF7354.1+1.4
SK1069.75-6.25
SN1078.25-5.75
SQ1080.25-5.25
SU1071.75-3.25
SX1066-1.5
SF71063.25-1.25
BOK33.08-0.05
BON33.36-0.08
BOQ33.45-0.1
CK374.00-4.5
CN377.50-3.5
WK449.50-2
WN459.00-2.25
The May report was fuel for the soybean market that locked limit up and posted new highs in the July contract at $10.91 1/2 with July meal at a new high of $367.40 . The catalyst was smaller South American crops and a 2016/17 ending stocks number at 305 mil bu. In reality, 305 mil bu does not imply there are shortages, but it does sound a lot smaller when compared against previous 405/450 mil bu ending stocks. So the funds embraced the new reality and bought a boatload of beans, sending prices sharply higher. Farmers responded in kind, selling a fresh amount of product at these new and surprising highs.
In the meantime, the corn and wheat markets stayed in their lane with numbers more in line with estimates. However the USDA was surprisingly aggressive acknowledging better corn exports (like good bean exports), which kept prices well supported. But the price action in corn and certainly wheat by no means is matching bean price action which appears to now be in its own world. Wheat is the brick in terms of price action, barely moving off its lows which could indicate a downhill slide when the soy complex weakens.
In the meantime we are still dealing with a Brazil Safrinha corn that is edging lower by all private estimations. Wheat is the brick of the Ag space, sitting at its lows and refusing to budge higher. As to South American numbers; the USDA was rather modest about lowering the size of the crop altogether with Brazilian bean production at 99mil mt while most private analysts are sitting at 96mil mt. Even Brazil's 81mil mt corn number seemed too high. So there possibly could be more damage to be factored into this market price.
The market opened cautiously with profit-taking after yesterday's bean and meal run-up in terms of price action. Wheat prices weakened along with corn.
SOY
Soybean and meal prices worked backwards into yesterday's rally but the setback was fairly shallow considering the size of the run-up. Meal spreads tightened with July/Dec inverse trading to $4.00. The July /Nov bean inverse traded up to 19c but values faded back to a 12 1/2c inverse. As meal and bean prices retraced its rally, soyoil futures remained more stable with crude oil's rally up to $46.13 /barrel and more business announcements for soyoil going to China and unknown. July and November bean volatility rose to 29% and 25%, respectively with the rally
GRAINS
Wheat prices opened on a firm note but soon turned lower on the day down towards overall contract lows. The May WASDE was most bearish for wheat, with world reserves forecast to climb to a record 257mil mt by the end of 2016/17. Kansas City losses were in the lead down 6 with CBOT prices trending down 3. Corn was also seeing a fair amount of weakness with the July contract turned away from key resistance at $3.86 as it worked back again towards its 100 day moving average at $3.73. Farmers continue to plant corn and it's always tough to keep corn prices up when planting begins. The July /Dec wheat spread traded into 27 3/4 carry while corn spreads were wider with July /Dec trading out to 7 1/4c.
No comments:
Post a Comment