CBOT May 24
Lastchanges
SMN388.9+1.2
SMQ376.4-1.1
SMU369.6-1.9
SMV363.7-2.6
SMZ361.7-2.9
SMF7356.8-3.5
SMH7344.4-3.3
SN1054.75-3.75
SQ1053-4.75
SU1039.5-6
SX1029.25-7
SF71026.5-7
SH71009.5-6.75
BON30.89-0.26
BOQ31.02-0.24
BOU31.13-0.25
CN397.50-0.25
CU400.00+0.25
CZ402.75+0
WN464.00+2
WU475.00+2
WZ493.25+2.25
The feature of the week is starting to be about fund position - evening into the 3 day weekend. Meal prices started the day yesterday by moving quickly higher and then lower, with the erratic behavior more indicative of a temporary top than new highs that can sustain and indeed we ended the day in the red. That set the tone for what we are seeing today, which is a corrective pullback where the market has the largest long positions namely meal and beans. July beans broke the lows of the last break at $10.52 with crossing lines of support now evident at $10.38. Meal prices triggered sell-stops under key support yesterday at 286.00 which sent it under key chart support points at 381.00, (which by the way is also against a trendline support value). Given the massive run higher, we could still head under these values and not disturb the uptrend that has been intact since April 1.
Corn values this morning are weaker but not giving up much ground given the rains moving across the Midwest and an 85% complete planting pace. The eastern cornbelt is the area most behind pace, up 13% to 77% complete. Beans advanced 20% to 56% complete, but the eastern cornbelt is still behind. US spring wheat is 95% planted vs. 77% a year ago.
Calls today are lower across the board as beans and meal attempt to find a bottom from fairly obvious tops at the moment. And for the moment, soyoil futures seemed to have stopped falling and are beginning a consolidation process wrapped around the 31c level
The markets opened lower but corn prices held in which eventually turned bean and meal prices higher. Consumers took advantage of the bean and meal break to get something priced.
SOY
July beans and meal started the day lower but found good commercial pricing activity which turned prices higher from lower. Inverse's strengthened as more bullspreading activity took place for the day. Jul /Dec meal traded up to 29.30 and July /Nov beans firmed to 30 1/4c as the flat price rally took place. July crush values firmed up to 1.40c/bu, with August at 1.14c/bu. In larger trades of note JP Morgan purchased 500 August 3.60 meal puts. Once again the day became about higher meal against weaker soyoil values with oilshare dropping down to .2830% in July.
GRAINS
July corn futures opened lower but held ground and worked higher throughout the early morning trade technically trading over $4.00 on fund buying activity. Corn progress will probably not gain much ground from this point as rains continue across the Midwest. Indiana and Ohio remain the states most behind the pace where corn areas could be in jeopardy - those probably heading to bean fields. Between wet forecasts and good export inspections yesterday the market remains mostly a firm trade. Corn is particularly higher against wheat, with the July wheat/corn spread trading at 61 1/2. The upward move in corn put a floor under soy as well as creating some support at wheat lows. Sep/Dec corn spreads traded into a 2 1/2c carry. Shortcovering for CME and Kansas City wheat was noted on a relatively small scale at trading range lows.
Fund recap
bot 2000 wheat
bot 5000 corn
bot 6000 beans
bot 4000 meal
sold 2000 soyoil
CLOSING COMMENTS
As mentioned earlier, we opened lower on key support and started to again rally upward this time led by corn. The funds typically will flow into a market and dominate for 2-3 months. We are therefore in month 2 and therefore lower support points should be taken as an opportunity to get a short covered or try the market from the long side. Today beans and meal opened at key support and held, and by no means wants to relinquish the strong market status. Lesson is stay flexible and until the market shows continued weakness for days on time be mindful of dominant trends which for beans/ meal are higher and now corn perhaps wanting to join the fray.
No comments:
Post a Comment