April 24, 2015
Morning Price Trends
Corn: Down 1 to 2
Soybeans: Down 3 to 4
Wheat: Down 1
Grain futures are modestly lower across the board this morning, with expiration of May options after the close today adding to choppy overnight trade. Outside markets are mostly quiet, but a weaker dollar isn't adding any strength to commodities so far.
Corn prices are down a little as the overnight session starts to wind down, with May hemmed in by the $3.70 strike price. Concerns about lost feed demand from bird flu and improving planting weather weigh on sentiment ahead of the weekend.
Export Sales reported Thursday were much better than expected at 34.2 million bushels and shipments were also good, reaching 41 million. Still, year-to-date shipments are running 6% behind the rate forecast by USDA for the marketing year.
Rains over the next week could bring coverage to most of the three I states, but the upper Midwest and western Corn Belt will continue to trend drier. Official 6- to 10-day and 8- to 14-day outlooks out yesterday are showing normal to above normal temperatures developing for the growing region for the first week of May, after a chilly end to April
The preliminary report from the CBOT showed daily futures volume up 46% Thursday to 499,178 and May-July spread trade surged 87% to 104,279 ahead of Friday's option expiration. Open interest was off 28,549 on only modest fund selling as traders got out of the nearby. Options volume fell 16% to 49,441 and 52% of the trades were for calls, with traders liquidating both calls and puts, but 13,409 in-the-money May $3.70 puts remain open, compared to only 3,418 May $3.70 calls.
Overseas prices today were lower. September futures on the Dalian exchange in China lost 2.1 cents to $10.265, as farmers there plan to plant more corn to take advantage of prices kept artificially high by the government. June corn in Paris morning trade also were 2.1 cents lower at $4.436, after conversions to bushels and adjustments for currency valuations.
Bottom line: The bird flu issue reinforces concerns about large old crop supplies. While the impact is likely to be limited, it doesn't add consumption at a time when usage needs a boost, keeping the market from focusing on new crop weather. As long as 80% of the crop is planted by mid-May the market won't get alarmed. For more, see my Weekly Corn Review. For specific recommendations and daily charts, subscribe to our free E-newsletter, Farm Futures Daily.