May 22, 2013
Morning Price Trends
Corn: Steady to up 3
Soybeans: Down 1 to up 4
Wheat: Steady to up 4
Market Analyst Paul Burgener is filling in for Bryce Knorr today.
Grains are trading mixed this morning with small gains in new crop corn, soybeans and wheat taking center stage. Overnight losses in old crop corn and soybean futures are small as the market looks to the ethanol report for direction this morning.
Corn prices are mixed, after yesterday's selloff following the Crop Progress report. Planting has slowed after rains returned to much of the Corn Belt and Northern Plains where seeding remains behind normal despite the big gains last week. New crop prices moved higher overnight as the markets continue to digest the impacts of Monday's report on the corn crop moving into the summer. Slow emergence may be more important than the actual number of acres planted as we move into the next couple months.
July futures are testing support at the 25-day moving average this morning as weekly petroleum status report is due out later with ethanol numbers for last week. December corn bounced back overnight after finishing Tuesday unchanged at the close.
With nearly 30% of the corn left to plant as we move toward Memorial Day, the rains have returned to the Midwest with a vengeance. Severe storms have been on the horizon in several areas for the past few days, and it looks like the rains will move further east into the Ohio River Valley today as a new round of moisture is setting up to move onto the Plains and into the western Corn Belt over the weekend. Heaviest rains are forecast to follow I-80 from Nebraska across to Illinois through the weekend.
Total volume on Tuesday moved back up to 262,379, according to the preliminary report from the CBOT. Open interest increased by just 544.
Overseas markets are up today. Futures on the Dalian exchange in China for September delivery gained 2.7 cents to $9.862, while June corn in Paris morning trade was up 6.2 cents to $7.116, after conversions to bushels and adjustments for currency valuations.
Financial markets in Europe were trading lower while Asian markets were mixed as the world financial markets wait for Fed Chairman Ben Bernanke's testimony before Congress later today as the minutes from the May 1 meeting are due. U.S. existing home sales are due out today, giving the market another glimpse at the strength of the economy from a consumer perspective.
The dollar is up slightly today as it continues to pressure energy prices as the weekly petroleum report is released later today. For more, see the Weekly Financial Review.
Bottom line: Fast planting progress the third week of May has removed the planting delay story from the market, though earlier setbacks likely mean 1.5 million acres or more won't get planted. That won't be enough to worry traders until either tight old crop stocks or weather come into play towards USDA's June 28 grain stocks and acreage reports. For more information, see the Weekly Corn Review. For specific recommendations and daily charts, subscribe to our free E-newsletter, Farm Futures Daily
Soybeans are mixed today, with some profit taking pressuring July futures after the past week's run higher. New crop prices are up slightly as planting slows due to rains across most of the area that remains to be seeded.
Much of the old crop buying is from domestic crush market looking to shake beans loose, beating the export market to remaining tight supplies. Slow planting progress is supporting the new crop price just above the $12 level with only 24% of the crop in the ground. There is some discussion that corn and spring wheat acres may shift toward soybeans with the slow progress numbers in both crops, but the market has yet to be concerned about those acres.
Volume in soybeans yesterday was up to 213,329 and open interest gained 3,440 on the day's trading.
Oilseed markets overseas were mixed today. September soybean oil in China was up fractionally to 55.2 cents/lb., and July futures on Malaysian palm oil ticked up 0.2 cents to 34.9. September soybeans in China were off up 5.3 cents to $21.515, August rapeseed in European morning trade was up 3.1 cents to $12.708, and July canola in Winnipeg was down 11.4 cents to $14.08. Note: All prices are in bushel equivalents including currency adjustments for contracts with significant volume.
Bottom line: Old crop soybeans remain in tight supply, but the market is anticipating rising production ahead. For more information, see the Weekly Soybean Review. For specific recommendations and daily charts, subscribe to our free E-newsletter, Farm Futures Daily
Wheat prices are higher this morning, as the market continues to trade dry weather in the Plains and rain in spring wheat country.
Futures finished mostly down on Tuesday as rains in Kansas and Oklahoma pushed the winter wheat markets lower, and slow planting progress in the Northern Plains added slight support to Minneapolis wheat. Most of yesterday's losses have been recaptured overnight as both Chicago and Kansas City wheat are trading about 4 cents higher.
With winter wheat ratings across the PNW and most of the Plains dropping, and continuing dry weather forecast for much of the area, harvest is beginning in Texas where the first yield reports will be coming soon. Late heading is setting the already stressed crop up for more challenges as heat begins to be an issue for the areas that are well behind normal.
Rains in the Northern Plains have halted seeding for the time being as large gains were made last week, but North Dakota remains well behind normal and the crop is only 10% emerged in that state. Look for some of these very late acres to shift to other crops if the rains continue for another week. For complete state-by-state winter wheat crop ratings and yield projections, see the Statistical Tables & Charts pages.
Total volume was down in Chicago Tuesday to 60,555, with open interest up 1,118 on light fund buying. Volume in Kansas City was up to 13,521, on rising open interest of 328. November futures on milling quality wheat in morning Paris trade was up 2.2 cents to $7.192, after conversions to bushels and adjustments for currency valuations.
Bottom line: Wheat is at a turning point. Failure to hold chart trendline support at all three exchanges may begin the slow slide into harvest lows, despite production concerns, both in the U.S. and around the world. For more details on the outlook, see the Weekly Wheat Review. For specific recommendations and daily charts, subscribe to our free E-newsletter, Farm Futures Daily.
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