MarketEdge AM Comments
May 25, 2023
(Phil Knuth)
Good Morning. Corn and soybean futures were mixed/lower overnight. July corn finished the overnight session off a half of a penny, settling at 5.8675. July soybeans were off a half of a penny, settling at 13.24. In the outside markets, as of 7:35am: The US Dollar Index is up 97 points, trading at 103.984. July crude oil is off $1.39, trading at $72.95 per barrel. Precious metals are all lower. Industrial metals are lower, except copper. The Electronic Mini-DJIA is off 67 points, trading at 32,787. Grain and oilseed futures chopped around overnight with very little direction and light trading volume. Though the recent recovery of futures may have a teeny tiny bit to do with dry weather in the eastern two-thirds of the Corn Belt, it has mostly been attributed to technical buying. Essentially, what has transpired since last week was more of a “dead cat bounce” after charting new multi-month lows than it was a true weather rally. Current forecasts calls for relief from the dry weather beyond the ten-day window and it is still incredibly early in the growing season to start hypothesizing about what negative impact this dry weather may or may not have on yields when the crop has just emerged or has just been planted. Export demand continues to struggle. At 7:30am, USDA released the weekly Export Sales Report. Although within the ranges of trade expectations, weekly sales bookings for both corn and soybeans were certainly more depressing than uplifting. Last week, new corn sales for the current marketing year were offset by sales cancellations by China and “unknown destinations,” resulting in a weekly net sales figure of -75,200MT. This figure is 78% lower than the previous week’s sales, is down noticeably from the prior four-week average, and is in the middle of the range of trade estimates. For the 2023/24 marketing year, 52,100MT of corn was booked for sale last week. This figure is on the lower end of the range of trade estimates. Last week’s corn export shipments totaled 1,502,800MT. This figure is 38% higher than the previous week’s sales and is 20% higher than the prior four-week average. Primary destinations were Japan, China, Mexico, Colombia, and Guatemala. Last week, 115,000MT of soybeans were booked for sale for the current marketing year. This figure is up noticeably from the previous week’s sales, but is 26% lower than the prior four-week average. For the 2023/24 marketing year, a measly 1100MT of soybeans were booked for sale last week. This figure is below the lowest trade estimate. Last week’s soybean export shipments totaled 287,300MT. This figure is 52% higher than the previous week’s shipments and is 26% lower than the prior four-week average. Primary destinations were Japan, Germany, Egypt, Mexico, and Indonesia. Yesterday, the funds bought 5000 contracts of corn, were net even on soybeans, and sold 6000 contracts of wheat. They are now estimated to be net short 85,660 contracts of corn, net long 3820 contracts of soybeans, and net short 135,475 contracts of wheat. From a chart perspective, July corn faces initial resistance at the overnight high, 5.90, followed by last week’s high charted on Monday, 5.9875, and then the psychological 6.00 mark, which was also the high from Monday, May 8th. Initial support lies at 5.8550, the overnight low, followed by 5.50, and then the 18-month low charted one week ago, 5.47. July soybeans face initial resistance at the overnight high, 13.2675, followed by 13.50, and then the psychological 14.00 level. Initial support lies at 13.1550-13.1675, which includes the lows from overnight, yesterday, and Tuesday, followed by 13.0475, the double-low from Monday and Friday that was also a 10-month low for the contract, and then 12.99, the 16-month low for the contract charted on May 22, 2022. Opening calls are mixed.
Have a great Thursday.
Good Morning. Corn and soybean futures were mixed/lower overnight. July corn finished the overnight session off a half of a penny, settling at 5.8675. July soybeans were off a half of a penny, settling at 13.24. In the outside markets, as of 7:35am: The US Dollar Index is up 97 points, trading at 103.984. July crude oil is off $1.39, trading at $72.95 per barrel. Precious metals are all lower. Industrial metals are lower, except copper. The Electronic Mini-DJIA is off 67 points, trading at 32,787. Grain and oilseed futures chopped around overnight with very little direction and light trading volume. Though the recent recovery of futures may have a teeny tiny bit to do with dry weather in the eastern two-thirds of the Corn Belt, it has mostly been attributed to technical buying. Essentially, what has transpired since last week was more of a “dead cat bounce” after charting new multi-month lows than it was a true weather rally. Current forecasts calls for relief from the dry weather beyond the ten-day window and it is still incredibly early in the growing season to start hypothesizing about what negative impact this dry weather may or may not have on yields when the crop has just emerged or has just been planted. Export demand continues to struggle. At 7:30am, USDA released the weekly Export Sales Report. Although within the ranges of trade expectations, weekly sales bookings for both corn and soybeans were certainly more depressing than uplifting. Last week, new corn sales for the current marketing year were offset by sales cancellations by China and “unknown destinations,” resulting in a weekly net sales figure of -75,200MT. This figure is 78% lower than the previous week’s sales, is down noticeably from the prior four-week average, and is in the middle of the range of trade estimates. For the 2023/24 marketing year, 52,100MT of corn was booked for sale last week. This figure is on the lower end of the range of trade estimates. Last week’s corn export shipments totaled 1,502,800MT. This figure is 38% higher than the previous week’s sales and is 20% higher than the prior four-week average. Primary destinations were Japan, China, Mexico, Colombia, and Guatemala. Last week, 115,000MT of soybeans were booked for sale for the current marketing year. This figure is up noticeably from the previous week’s sales, but is 26% lower than the prior four-week average. For the 2023/24 marketing year, a measly 1100MT of soybeans were booked for sale last week. This figure is below the lowest trade estimate. Last week’s soybean export shipments totaled 287,300MT. This figure is 52% higher than the previous week’s shipments and is 26% lower than the prior four-week average. Primary destinations were Japan, Germany, Egypt, Mexico, and Indonesia. Yesterday, the funds bought 5000 contracts of corn, were net even on soybeans, and sold 6000 contracts of wheat. They are now estimated to be net short 85,660 contracts of corn, net long 3820 contracts of soybeans, and net short 135,475 contracts of wheat. From a chart perspective, July corn faces initial resistance at the overnight high, 5.90, followed by last week’s high charted on Monday, 5.9875, and then the psychological 6.00 mark, which was also the high from Monday, May 8th. Initial support lies at 5.8550, the overnight low, followed by 5.50, and then the 18-month low charted one week ago, 5.47. July soybeans face initial resistance at the overnight high, 13.2675, followed by 13.50, and then the psychological 14.00 level. Initial support lies at 13.1550-13.1675, which includes the lows from overnight, yesterday, and Tuesday, followed by 13.0475, the double-low from Monday and Friday that was also a 10-month low for the contract, and then 12.99, the 16-month low for the contract charted on May 22, 2022. Opening calls are mixed.
Have a great Thursday.