CBOT May 19
Lastchanges
SMN378.1+5.4
SMQ371.8+3.2
SMU368.3+2.6
SMV364+2
SMZ362.4+1.4
SMF7358.5+1.2
SMH7347.7+1.1
SN1071.5-3.75
SQ1073-4
SU1062-4
SX1053.5-4
SF71051.25-5.25
SH71032-4.75
BON31.91-0.54
BOQ32.03-0.53
BOU32.15-0.53
CN390.00-9.5
CU392.50-9.75
CZ397.25-8.75
WN468.75-11.25
WU479.50-10.5
WZ497.50-8.5
GOOD MORNING,
Prices are lower across the board this morning. Beans and meal prices are working lower but the pronounced weakness is being led by soyoil futures, off by over 50 pts to begin the day. Soyoil prices are now under all support and moving averages, while meal futures are just a stone's throw away from contract highs. July oilshare traded down to new lows of .30%. In the meantime, grains continue to move with corn hanging close to the top of recent values while wheat markets chop sideways.
Since it's Thursday we do get export sales for a new fundamental input. Soyoil sales and beans were good, but today the market has a "get -me - out " feel, working to the lower end of trading ranges except for meal. Wheat futures are in the lead to the downside with poor export sales in general for grains.
Calls are lower across the board and get the sense that this may be a more difficult day to recoup losses as weather is going to turn warmer and drier from here - bumping up planting progress next week
-Strategie Grains cut its forecast for the European Union's year-end stocks for wheat even as corn stocks continue to swell. The increased demand for EU wheat was at corn's expense as farmers chose the cheaper grain for animal feed.
-The Dow is opening lower with another plane missing in what could be a terrorist act.
-In USA, the number of people seeking jobless aid fell last week by 16,000 to 278,000.
The markets opened lower as called but once again meal prices traded into new contract highs on the board as soyoil futures traded down to new lows. Grains were weaker with warmer and drier forecasts creating a round of profit-taking on bullish corn bets.
SOY
The major feature in the soy complex was higher meal. The July contract jumped to new contract highs at 378.50 as more uncovered consumers have to get something on the books. The chart formation continues to look the friendliest for this market, continuing to trade in an uptrend channel and posting new contract highs on good volume. Funds purchased meal against soyoil, which pressured July oilshare below 30% to .2964%. July crush values jumped to 1.11c/bu as meal prices traded upward. More bullspreading was noted with July /Dec meal inverses strengthening to 16.20 and July /Nov beans trading stronger again to a 21 1/4c high from opening values that were closer to 15c July beans briefly broke key support at 10.62 triggering small sell-stops, but today's decent recovery negates the impact of that break.
Corn and wheat values were lower today as conditions appear to warm and dry out for the balance of the week. Trade turned extremely technical as farmers took advantage of the $4.00 level in July corn to get something on the books. As support points were breeched the funds began to throw out more of the recent length with not as much pricing activity. CBOT wheat values dropped lower versus lesser losses in KC contracts. Spreads weakened with the July /Dec corn carry widening back out to 7 1/4c from 5 1/2c lows.
FUND RECAP
sold 6000 wheat (from 5000 earlier)
sold 17,000 corn (from 13,000 earlier)
sold 6000 beans (from 4000 earlier)
bot 2000 meal (from bot 1000 earlier)
sold 8000 soyoil (from sold 6000 earlier)
OUTSIDE MARKETS
The Dow opened 48 pts loewr and stayed in the red for most of the day, off 89 pts by midday. The strengthening US dollar was one of the major catalysts for lower Ag trade today. The chance that we could see an interest rate increase (which would strengthen the US dollar further) played into more downside as much as improving weather forecasts.
CLOSING COMMENTS
Meal prices seem to live in a world of their own, as they jump to daily new highs. Expect that the good close today may see follow-through in meal in tonight's session. Oilshare continues sloppy and traders continue to chase meal while selling soyoil on weaker palm prices. Soyoil charts point to true definition of a top in place. Bean charts continue to bend but do not break. Continue to own corrective pullbacks in beans and if corn gets into the ground more buy bean/sell corn price action.
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