CBOT May 26
Lastchanges
SMN409.6+2.4
SMQ393.1+2.7
SMU381.4+2.1
SMV374.9+2.2
SMZ372.9+2.4
SMF7365.4+1.2
SMH7350.8+1
SN1079.75-5.75
SQ1077.25-4.5
SU1061.75-3.75
SX1050.5-3.75
SF71047-1.75
SH71025.75+0
BON31.04-0.3
BOQ31.16-0.3
BOU31.30-0.3
CN408.25+3.5
CU410.50+3.25
CZ409.75+1.25
WN481.25+15.25
WU491.75+14.5
WZ508.50+13.5
GOOD MORNING
More strength around the board yesterday with funds continuing to add bean and meal length to their portfolios. Farmers are participating in the rally to a lesser extent as they are out in the field planting. Global holidays begin today - with Memorial Day on Monday. We will open higher on technical follow-through with chartists looking at positive chart signals from bull flag break-outs (beans) to busting through the top of uptrend channels (meal). July beans hit a new contract high this morning at $10.98 while July meal traded up to 419.80. July corn finally posted a new high at 4.09 1/4 versus the May 10th high at 4.07 1/4. Wheat remains unattended, though small shortcovering activity was noted due to strength around the rest of the board. And soyoil futures joined higher price action supported by a bust upward through the $50/barrel crude oil level and higher palm. FYI, Rolls from July to deferreds will begin this week into next which will make spread activity quite interesting.
- Export sales were released today after the continued flashes were noted this week for beans, corn and soyoil. They were good to very good for everything but wheat. We open higher this morning on technical follow-through to the upside with charts guiding the price action:
- The Dow will also open higher as it makes a huge sideways trade between 16,500 and 18,000. And that's fine by this writer as long as it stays that way without exit to the downside. Higher crude will put a floor under equities again, even as commodities continue to come to life from 2009 lows.
The markets traded higher on the day but profit-taking was noted from the start of the day with corn, meal and soyoil futures in the red shortly after the start. Coincidentally so were macros with stocks down around 10:00.
SOY
The bean and meal markets set new highs for the move upward with an early round of profit-taking, as often happens in markets that have established higher trends. There were also setbacks in the inverses but those pullbacks were met with buying interest. July /Nov beans inverses traded from a low of 28 1/2 to 33 3/4 while July /Dec meal started the session at 32.60 but worked back up to $45.00 again. Will be interesting to see how the rolls play out which will begin tomorrow. In terms of total open interest, CME July bean futures stood at 389,703 contracts this AM followed by November at 281,895 contracts. July meal open interest stands at 163,420 contracts followed by Dec at 82,376. Canola futures could not catch up with the other markets, mirroring a weaker soyoil trade off by 3.30 to trade to a 518.10 low. Buy meal /sell soyoil trade once again became the major feature taking July oilshare during the trading session to yearly lows at .2724%. July crush set a new contract high for this time of the year at $1.72c/bu.
GRAINS
The rolls will begin this week spreading or liquidating July contracts. Jul corn open interest stands at 628,160, with December the next month having the most open interest at 350,778 contracts. Wheat firmed with small shortcovering activity as well as a correction in the July wheat/corn spread which firmed to 70 1/2 from 62 1/4. Wheat continued to gain on corn throughout the morning. Kansas City values were also trading higher as adverse weather moved through the southern plains. But Kansas and CBOT values were higher by similar amounts, up 11-12 by midday.
Fund recap
bot 4000 wheat (from 2000 earlier)
sold 5000 beans
sold 4000 soyoil (from 2000 earlier)
bot 7000 corn
bot 5000 meal
CLOSING COMMENTS
Traders continue to watch volatility grow in the bean and meal markets. For sure buyers / traders who are short are feeling the discomfort and using setbacks to get out of positions. Technicals in beans and meal continue to be so strong - that until we see a key reversal hard to call a top though there does feel like panic sometimes as we reach a new crest. Traders now want to see confirmation that the plants are safely in the ground and healthy before they retreat. By July 4 we will find out a great deal about acreage and crop health, but till then, fade these markets at your own risk.
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