CBOT May 17
Lastchanges
SMN369.1+7.9
SMQ366.5+7.8
SMU364.8+7.6
SMV362.4+7.1
SMZ362.2+6.5
SMF7359.4+5.8
SMH7348.1+4.8
SN1080.25+15.75
SQ1082.5+15.75
SU1073.75+14.25
SX1067.25+12.25
SF71064.5+10.75
SH71043.5+9.25
BON32.78-0.01
BOQ32.89-0.01
BOU33.01-0.01
CN397.00+3
CU399.75+3.75
CZ403.75+3.75
WN481.75+7
WU491.25+7.25
WZ506.00+7
The markets seem to be focused right now on two things - making sure the corn crop goes in under timely circumstances, and how much of the bean and corn crops are going out the door for exports. NOPA crush reported as expected but it is the second largest crush for the month of April, with processors now owning ample stocks courtesy of our recent rallies.
This morning prices are bouncing back after consolidating over the last few days. Jul meal prices are within a stone's throw of recent contract highs at 367.70. If July beans trade back over $10.75 will send us directionally higher as well, suggesting we could make another run at recent tops. The corn price action remains the weakest when it approaches its key major resistance, and for the July contract that price is $3.95, the place where most current rallies have failed.
The Dow is going to begin weaker this morning, though crude oil penciled in new highs at $48.42/gallon today. When will the public begin to view crude oil as expensive again? Probably when gasoline prices cross $3.00/gallon.
This week's weather is wet and cool, but the farmers made some progress given the drier weather a week ago. Corn planting progress was 75% complete, at the highest end of trade idea. The eastern cornbelt remains challenged while the west and the north were full speed ahead. Spring wheat conditions are progressing with 89% complete, while the southern plains continues to receive good rainfall keeping the HRW crop in good shape. Bean plantings remain in line with recent averages at 36% complete, ahead of the five year average at 32%.
The soy complex opened higher and quickly rallied upward led by surging meal values that printed new contract highs for the move. Grains followed at a slower pace. There are no new announcements, stories or rumors other than chartists continuing to respond to technical considerations in terms of the higher price action.
SOY
The soy complex opened higher and the chart that had the most suggestive upside potential (meal) did indeed rally and post a new high for the move upward. July oilshare collapsed further as meal rallied against soyoil price action, breaking the 31% level to trade to .3080%. July crush strengthened further to 92c/bu. Bullspreading activity for beans took the July /Nov inverse back up to a 13 1/4c high bouncing off a 9c low for the move downward from overall highs of 28c. Oil spreads widened trading out to 58 pts for July /Dec soyoil spreads while the July /Dec meal spread inverted to stronger values at $7.50. All in all the price action again was firm illustrating why funds continue to own more bean and meal length.
GRAINS
Stronger soy complex price action created more short-covering in wheat, where the July contract traded past $4.80 triggering small buy-stops in the process. Wheat gained against corn with the July wheat/corn spread trading up to 87 3/4c from lows at 80 1/4c. CBOT wheat values were stronger than KC. July corn setbacks were viewed as buying opportunities, while trade past key resistance of 3.95 set off more technical buying signals.
Fund recap
bot 3000 wheat
bot 4000 corn
bot 7000 beans
bot 3000 meal
bot 1000 soyoil
CLOSING COMMENTS
The markets have been firm all day as funds come back to buy more. Today does not feel like a "fall apart" day, as farmers sell into fund ownership. Those waiting for setbacks are now coming in to price something. If wanting to be short have to still pick the market that appears ready to always slide lower first to new lows which includes wheat and soyoil. For the others, think we hold onto our strong tone into day's end.
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