CBOT Jun16
Lastchanges
SMN397.7-9.5
SMQ396.1-8.7
SMU395.2-7.9
SMV394.3-7.4
SMZ394.6-7.1
SMF7390.3-6.7
SMH7370.9-3.8
SN1134.5-21.5
SQ1133.5-21.5
SU1123.75-21.25
SX1119.25-19.25
SF71117-18.75
SH71083.75-13.75
BON31.16-0.8
BOQ31.30-0.8
BOU31.44-0.8
CN425.25-3.75
CU430.50-3.5
CZ435.75-3.75
WN472.50-5
WU484.75-4.75
WZ504.25-6
Prices are weaker this morning following through from yesterday's sell-off. Charts are starting to look remarkably similar denoting some topping price formations. Weather remains hot but rains are in the forecast next week. The market feels like it is reaching the stage where it needs more information before it takes a further leg upward. If the information is all bearish, the next direction could very well be lower as funds are long everything but wheat. For sure they have been exiting the long side of soyoil, as we saw yesterday. There are still plenty of consumers and others needing to get something priced who are waiting for setbacks such as this. We are still in the process of setting back and buyers are still anxious to get involved which is one reason that while they break, the downside continues limited.
Export sales were released this morning and they were actually the best for beans. Other sales were neutral to low end. In the macro element, global markets are actually higher which could lend a hand to a weaker Dow this morning, though applications for US unemployment benefits rose last week.
Call are mixed this morning, weaker for soyoil futures which continues to head lower with July now under 32c. Crude oil is weaker today as soyoil charts search for a bottom to this sell-off.
Funds are long corn, beans, meal, and smaller amounts of soyoil. They remain short wheat. And....... they are watching the weather closely. This week's hot temperatures are due to break next week along with some rainfall. But.....if the heat returns without precipitation we could take out our posted highs in a heartbeat.
The feature of the day was a correction in bean, meal and soyoil charts. Soyoil weakness led the way down with funds taking profits on bullish positions. Grains were largely ignored.
SOY
Beans, meal, and soyoil futures sold off to lower levels of trade. Inverses continued to leak lower for July /Dec meal spreads, dropping back to a 3.00 inverse from a morning high of 6.30. July /Nov beans followed weaker trade with inverses setting back to 15 with a 21 3/4c high. Dec oil share was weaker falling to .2872% on soyoil's weakness. Chart prices continued weaker heading down to the only spot of support for Dec charts which was crossing at 3140. For today the low of 3175 Dec was a new low for the move down. The main reason for the lower move was due to weaker chart price action in recent days and an overly long fund position, where futures / options maintain near record length in beans and meal. Crush values were weaker as meal prices dropped with Dec trading at 1.00c/bu.
GRAINS
Corn prices headed lower but at a shallower setback pace than in beans, meal, or soyoil. Hot temperatures may impact corn right now and the funds are not long as much corn as they are beans. Planting progress will continue to suggest whether we need to tack on gains next week or not. Dec corn remained in correction mode on heavy fund selling into commercial pricing activity. Sep/Dec corn carries were trading from a 5 1/4-6c carry. Wheat futures were lower taking out the 100 day moving average.
Fund recap
sold 10,000 corn
sold 9000 beans
sold 6000 meal
sold 7000 soyoil
CLOSING COMMENTS
Follow the weather, the planting progress and the charts. Right now, consumers are still justified in buying breaks, as we begin the process of forming a trading range from the current tops. But we are still in the midst of hot and dry weather, and need to see adequate rainfall continue. While charts look "toppy" (and therefore we are in the process of breaking lower) for beans and meal, they could still rally back. The markets did get too saturated with length which means we define current trading ranges. In the case of soyoil, at 3150 Dec we could be getting close to a cyclical low.
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