CBOT May 25
Lastchanges
SMN407.2+18.3
SMQ390.4+14
SMU379.3+9.7
SMV372.7+9
SMZ370.5+8.8
SMF7364.2+7.4
SMH7349.8+5.4
SN1085.5+30.75
SQ1081.75+28.75
SU1065.5+26
SX1054.25+25
SF71048.75+22.25
SH71025.75+16.25
BON31.34+0.45
BOQ31.46+0.44
BOU31.60+0.47
CN404.75+7.25
CU407.25+7.25
CZ408.50+5.75
WN466.00+2
WU477.25+2.25
WZ495.00+1.75
GOOD MORNING,
Trade is going to thin out from now into next Monday night. South America is on holiday soon and US markets soon to follow. The relentless theme of strong meal with all else following continues today. Calls are higher across the board with July meal once again in strike of new contract highs after breaking hard this week to alleviate overbought (too many longs) this week. Despite CME raising margins, meal prices are called higher again with beans following and soyoil finding a nice level of support. Soyoil prices are also finding validation this morning from higher crude, which posted a new high at $49.95 (no doubt we hit the magical $50/barrel mark, just a matter of time), higher canola, and higher palm.
Weaker Chinese Dalian Exchange prices were said to have been the major force at work for Mon/Tues meal and bean break. Now, a newswire reported that China may open its commodities futures markets to overseas and financial investors. Just what the markets needed - right? More volatility. At any rate,macro markets are happy today with not only commodities higher but many global stocks as well.
Have to be careful today as the herds of money are thinning in front of the holidays and therefore we could see more exaggerated trade in lower volume. But we will open higher on a no-doubter day. The many business announcements over the last several days for corn, beans, and soyoil suggest that we could remain firm in front of export sales out tomorrow - then followed by an end of week profit-taking session.
The markets opened higher and funds were back to buying again. July meal posted a new contract high once again, triggering stops in the process. Grains came along for the ride at a snail's pace particularly wheat. The corn/bean ratio traded up to 2.68 today.
SOY
The opening feature of trade was the rebound in the meal market, which traded down to new lows this week and like a sling-shot traded back to new contract highs with July climbing past all resistance levels to 408.30, a level that sparked an overbot signal at its highest level this season at 79%. Fund buying accelerated then in the soybean market as it tried to keep pace, also trading back towards previous trading range highs placed on May 10th at 10.94. July soyoil rallied but more modestly so which pushed July oilshare back under 28% to .2778%. Crush values soared with July staging an advance to 1.57c/bu and August at 1.21c/bu, setting new seasonal all time highs. The July / Dec meal inverse traded to a $39.90 high with July /Nov beans at a 34c high, close to the peak of 39 1/2. July /Dec soyoil spreads moved to a 67 pt carry.
GRAINS
Wheat futures trade appeared to be mostly abandoned today with all the volume and price action in markets elsewhere. Since higher markets need volume, the lack of interest in wheat had prices moving mostly firm but modestly so. July wheat /corn moved to 62c on the strength in corn. July corn prices advanced past $4.00 which once more attracted more buying enthusiasm while nearby spreads continued to strengthen with July /Dec at 3 1/2c carry.
Fund recap
even wheat
bot 6000 corn
bot 8000 beans
bot 5000 meal
bot 2000 soyoil
CLOSING COMMENTS
The trade today is positive, macro and Ags alike. Consumers in the soy complex are clearly using corrective price pullbacks to get something on the books. The speed of this day-to-day rally is really prompting the question of how many other consumers out there needing to price. And that could be the real issue as breaks continue to see support with beans / meal roaring back. Don't think this rally will lose much steam into the close. Friday may still be the best day for profit-taking
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