CBOT May 16
Lastchanges
SMN361.2-1.8
SMQ358.7-2.3
SMU357.2-2.5
SMV355.3-2.7
SMZ355.7-2.7
SMF7353.6-1.9
SMH7343.3-0.4
SN1064.5-0.5
SQ1066.75-0.25
SU1059.5+0
SX1055+0.5
SF71053.75+2
SH71034.25+4.25
BON32.79+0.29
BOQ32.90+0.29
BOU33.02+0.3
CN394.00+3.25
CU396.00+2.75
CZ400.00+1.75
WN474.75+0
WU484.00+0
WZ499.00-0.25
On Monday's we often tend to trade "positions" from the commitment-of-trader's report last Friday. Today was no exception with the futures /options positions for beans (on the long side) nearing the 200,000 mark, and funds adding to meal length. The markets opened lower and more profit-taking from the bull traders in beans and meal set the tone for the day. Higher crude oil and palm values supported soyoil.
At 10:00 export inspections were released as follows:
corn: 1,110,600 tons vs. 1,148,155 tons wk ago
wheat: 367,881 tons vs. 500,309 tons wk ago
beans: 194,637 tons vs. 146,040 tons wk ago
- Rallies today were taken as an opportunity to get rid of some length in the bean and meal market though bean /corn inspections were neutral and wheat low end.
- Informa was released with US soybean acreage forecast at 83 mil acres in 2016 and corn acreage at 93.4 mil. This compared to USDA at 82.2 mil for beans and 93.6 mil for corn.
SOY
Soybeans and meal traded lower on the day as worse weather for corn planting this week which could spell more potential bean acres in the future. Soyoil prices were higher by 25 pts lifting oil-share back towards 3130-315%. At 11:00 the April NOPA crush values were released which were just about what the market anticipated at 147.6 mil bu, but year on year it is the second highest April on record. Soyoil stockpiles grew to a larger-than-expected 1.94 bil pounds, over the upper end of trade estimates.
GRAINS
Buy corn /sell bean trade was the noted feature of the morning. Farmers are now getting concerned about getting the last portion of their corn crops in the ground given wet and cool forecasts. But the trade is also responding to technical price action, where July corn traded upwards towards previous trading range resistance in the July contract at $3.95. Funds are not long as much corn as beans, and are a net wheat short. The July /Dec corn spreads narrowed into 6 3/4c carry from 8c carry, while July /Dec wheat traded to 24c. July wheat/corn traded to 79c with wheat values down 4 as compared to a steady corn market. July corn now has the lion's share of the total open interest standing at 612,958 contracts followed by December at 320,414 contracts.
- Crude oil is trading to new highs with an endorsement from Goldman Sachs that the major direction from this point forward will be higher. Macros are positive. Feels like weaker markets may turn and trade higher after the open with more large positions on the longer rather than shorter side of the market.
- USDA reported the sale of 128,000 tons of corn sold to South Korea in 2015/16.
- The Dow opened slightly weaker but quickly traded higher on the day, up 159 pts by the midday crude oil rallies to new trading range highs at $47.85/barrel.
Weather for the Midwest is cool and wet with temperatures beginning to warm into the end of the week. There was actually snowfall in Minnesota, though it has to now be the last for the year. The advertised number for corn planting progress this afternoon is around 70/75% vs. a 70% average. Planting progress for beans is expected to be around 33/37% complete vs. a 31% average. As far as Brazil's corn crop worries continue to mount over the size of the safrinha area with conditions continuing dry.
In terms of overall positions, it appears as though funds reduced their net long positions in corn prior to the May WASDE while maintaining a short position in wheat. The USDA supported the validity of being short wheat, and futures in this market remain stubbornly close to the overall low end of the range.
Fund recap
sold 2000 wheat
sold 4000 beans
bot 2000 soyoil
sold 5000 meal
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