May 24, 2013
Morning Price Trends
Corn: Down 1 to 2
Soybeans: Steady to down 4
Wheat: Up 1 to 3
Morning Market Review will not publish Monday due to the Memorial Day Holiday. Markets will be closed.
Grain futures are mostly lower this morning, after a quiet overnight session that featured some profit taking on the heels of this week's volatile rally.
Corn prices are a little softer, as electronic-only trading begins to wind down before the pit open. July futures confirmed a move yesterday above its 50-day moving average but failed to hold a test of the 50% retracement of the April-May selloff.
New crop business pushed Export Sales reported Thursday to 17.6 million bushels, above trade guesses. USDA also Wednesday announced the sale of 21.3 million bushels of new crop corn to China and unknown destinations under its daily reporting system for large purchases. Those deals should show up in next week's totals. Israel and Taiwan bought some corn today, but origination is likely to come from South America.
Storms will slowly move across the Western Corn Belt over the holiday weekend, bringing potential for heavy rains north of I-70 according to today's seven-day coverage map. Lesser amounts are forecast for the Great Lakes, which will gradually warm back up. Official 6- to 10 and 8- to 14-day forecasts out yesterday call for above normal temperatures east of the Rockies, with above normal precipitation north of I-80. The latest American model is noticeably wetter from northern Illinois back through the western Corn Belt.
Total volume fell 8% Thursday to 226,705, according to the preliminary report from the CBOT. Open interest was up 4,889 on modest fund buying.
Overseas markets were a little weaker today. Futures on the Dalian exchange in China for September delivery fell fractionally to $10.074, and June corn in Paris morning trade was off 1.6 cents to $7.193, after conversions to bushels and adjustments for currency valuations.
Financial markets were mixed in Asia and Europe today, as investors continue to focus on potential for the Federal Reserve to unwind its programs of quantitative easing aimed at holding down long-term interest rates and stimulating the economy. The dollar is weaker, but that's providing little relief to other commodities, with crude oil and gold both weaker.
Durable Goods orders out this morning are expected to rise 1.5% for April. In data reported Thursday, Weekly Unemployment Claims fell more than expected, while the FHFA House Price Index and New Home Sales both rose more than expected.
Bottom line: The new crop planting story is still alive, with a wet forecast increasing odds some ground won't get planted. But traders remain mostly focused on tight old crop supplies. 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 weaker, after July futures traded both sides of $15 following Thursday's high volatile session. The nearby rallied up to within a half-cent of a mid-September high at $15.4725, before profit taking set in.
Extremely tight old crop supplies remain the driving force behind the rally, though the surge brought some last beans out of farmer storage. Export sales of 2012 beans came in at 6.7 million bushels, with active new crop purchases pushing the total to 37.6 million. USDA separately Thursday announced the sale of another 4.2 million bushels of new crop soybeans to China, under its daily reporting system for large purchases.
Volume in soybeans yesterday surged more than 50% to 307,139, easily topping the total in corn. Open interest was up 5,231 though funds were flat on the session.
Oilseed markets overseas were mixed. September soybean oil in China were fractionally stronger to 55.7 cents/lb, while July futures on Malaysian palm oil were closed for a holiday. September soybeans in China fell 9.8 cents to $21.308, August rapeseed in European morning trade was off 1.5 cents to $12.745, and July canola in Winnipeg was up 3.1 cents to $14.139. 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 quietly stronger this morning, amid more signs the export market worldwide is starting to pick up.
While old crop business winds down with 8.7 million bushels last week, new crop bookings rose to 26.3 million bushels for the marketing year that begins June 1. Algeria also booked a big tender this week, the first large deal for the region in a while.
Overall production potential around the world continues to show no outright disasters, though bumper crops look like they'll be rare, too. Today's seven-day coverage map brings rain into parts of Texas, where it may interfere with early harvest, though fields in Oklahoma and Kansas may still benefit a little. The forecast looks wet for spring wheat seeding, with official 6- to 10 and 8- to 14-day forecasts out yesterday calling for above normal precipitation on the northern Plains. The latest American model looks wetter for spring wheat areas as well.
Total volume in Chicago jumped 62% Thursday to 115,144, with short covering by funds cutting 5,474 on the rally. Volume in Kansas City was up 70% to 19,657, though open interest rose for hard red winter wheat.
Across the Atlantic, most of the Black Sea wheat belt should pick up some precipitation over the next two weeks, though amounts in parts of Southern Russian and eastern Ukraine may be less than needed. Cool weather remains a concern in France, with overall production in Western Europe hurt by wet conditions over the winter and spring. November futures on milling quality wheat in morning Paris trade were down 1.65 to $6.825, after conversions to bushels and adjustments for currency valuations.
Argentina's wheat belt shows only light precipitation over the next two weeks, while Australia should also turn dry following this week's crucial rainfall for seeding.
Bottom line: Wheat appears to have dodged a bullet so far, but growers with good potential should consider adding Chicago July $7 protection to guard against lower prices. 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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