MarketEdge AM Comments
May 31, 2023
(Phil Knuth)
Good Morning. Corn and soybean futures were sharply lower overnight. July corn finished the overnight session off 11 ¾ cents, settling at 5.8225. July soybeans were off 24 ¼ cents, settling at 12.7225. In the outside markets, as of 7:50am: The US Dollar Index is up 250 points, trading at 104.415. July crude oil is off $2.17, trading at $67.29 per barrel. Precious metals are mixed. Industrial metals are lower, except tin. The Electronic Mini-DJIA is off 109 points, trading at 32,980. Current weather forecast models and the outside markets pressured grain and oilseed futures overnight. The US Dollar Index is sharply higher and crude oil and most commodities are lower in response. Unfortunately, grain and oilseed futures are not immune to these macroeconomic headwinds. Meanwhile, areas of the Western Corn Belt received welcome rainfall in the last 24 hours and the extended forecasts for the 1-5 day, 6-10 day, 11-15 day, and 16-30 day timeframes all offer better chances for rainfall across the entire Corn Belt on today’s forecast models than yesterday’s forecast models. Of course, in a weather market, things can and do change on a dime, so the situation remains rather fluid and the crop is certainly far from “made.” The change in the forecast between yesterday and today is a perfect example of how weather markets operate. All traders can do is trade the forecast that is in front of them day by day. Yesterday’s Crop Progress and Conditions Report rated national corn planting progress at 92% complete as of Sunday night. This figure is an 11-point advancement from last week and is eight points ahead of last year at this time and the five-year average. The first national corn crop condition rating of the season was released yesterday. The US corn crop was reported to be 69% good to excellent. This figure is slightly below the average trade estimate, is four points behind last year at this time, and is three points below the five-year average. The national soybean crop was reported to be 83% planted as of Sunday night. This figure is a 17-point advancement from last week, is 19 points ahead of last year at this time, and is 18 points ahead of the five-year average. Yesterday, the funds sold 5000 contracts of corn, sold 10,000 contracts of soybeans, and sold 10,000 contracts of wheat. They are now estimated to be net short 90,650 contracts of corn, net short 5290 contracts of soybeans, and net short 133,060 contracts of wheat. From a chart perspective, July corn finds initial support at the overnight low, 5.82, followed by 5.50, and then the 18-month low charted on May 18th, 5.47. Initial resistance is at the overnight high, 5.9475, followed by the psychological 6.00 level, and then 6.0675, the one-month high charted on Friday. July soybeans charted a new 16-month low overnight, at 12.7075. That level now stands as initial support, followed by 12.50. Initial resistance is at the psychological 13.00 mark, followed by 13.4350, Friday’s high, and then 13.50. Opening calls are lower.
Have a great Wednesday.
Good Morning. Corn and soybean futures were sharply lower overnight. July corn finished the overnight session off 11 ¾ cents, settling at 5.8225. July soybeans were off 24 ¼ cents, settling at 12.7225. In the outside markets, as of 7:50am: The US Dollar Index is up 250 points, trading at 104.415. July crude oil is off $2.17, trading at $67.29 per barrel. Precious metals are mixed. Industrial metals are lower, except tin. The Electronic Mini-DJIA is off 109 points, trading at 32,980. Current weather forecast models and the outside markets pressured grain and oilseed futures overnight. The US Dollar Index is sharply higher and crude oil and most commodities are lower in response. Unfortunately, grain and oilseed futures are not immune to these macroeconomic headwinds. Meanwhile, areas of the Western Corn Belt received welcome rainfall in the last 24 hours and the extended forecasts for the 1-5 day, 6-10 day, 11-15 day, and 16-30 day timeframes all offer better chances for rainfall across the entire Corn Belt on today’s forecast models than yesterday’s forecast models. Of course, in a weather market, things can and do change on a dime, so the situation remains rather fluid and the crop is certainly far from “made.” The change in the forecast between yesterday and today is a perfect example of how weather markets operate. All traders can do is trade the forecast that is in front of them day by day. Yesterday’s Crop Progress and Conditions Report rated national corn planting progress at 92% complete as of Sunday night. This figure is an 11-point advancement from last week and is eight points ahead of last year at this time and the five-year average. The first national corn crop condition rating of the season was released yesterday. The US corn crop was reported to be 69% good to excellent. This figure is slightly below the average trade estimate, is four points behind last year at this time, and is three points below the five-year average. The national soybean crop was reported to be 83% planted as of Sunday night. This figure is a 17-point advancement from last week, is 19 points ahead of last year at this time, and is 18 points ahead of the five-year average. Yesterday, the funds sold 5000 contracts of corn, sold 10,000 contracts of soybeans, and sold 10,000 contracts of wheat. They are now estimated to be net short 90,650 contracts of corn, net short 5290 contracts of soybeans, and net short 133,060 contracts of wheat. From a chart perspective, July corn finds initial support at the overnight low, 5.82, followed by 5.50, and then the 18-month low charted on May 18th, 5.47. Initial resistance is at the overnight high, 5.9475, followed by the psychological 6.00 level, and then 6.0675, the one-month high charted on Friday. July soybeans charted a new 16-month low overnight, at 12.7075. That level now stands as initial support, followed by 12.50. Initial resistance is at the psychological 13.00 mark, followed by 13.4350, Friday’s high, and then 13.50. Opening calls are lower.
Have a great Wednesday.