MarketEdge AM Comments
May 12, 2023
(Phil Knuth)
Good Morning. It is Report Day. At 11am, USDA will release the May WASDE Report. Nearby corn and soybean futures finished the overnight session higher while deferred contracts were steady/lower. July corn was up a quarter of a penny, settling at 5.8250. July soybeans were up 3 ½ cents, settling at 14.09. In the outside markets, as of 7:45am: The US Dollar Index is up 233 points, trading at 102.291. June crude oil is up 30 cents, trading at $71.17 per barrel. Precious metals are all lower. Industrial metals are lower, except copper. The Electronic Mini-DJIA is up 111 points, trading at 33,482. All eyes are on the report at 11am, however, typically after the official May USDA figures are published, traders digest the information and immediately return to trading weather and understandably so. Unfortunately, on the weather front, there are currently no major concerns for the Corn Belt for the rest of the month of May that would inspire a rally and in many areas planting is complete or near complete. On today’s report, minimal changes are expected on the old crop balance sheets. The old crop domestic corn and soybean carryout projections are expected to increase slightly. The average trade estimate for the old crop corn carryout projection is 1.366 billion bushels. Last month’s figure was 1.342 billion bushels and the range of trade estimates runs from 1.242 to 1.472 billion bushels. The average trade estimate for the old crop soybean carryout projection is 212 million bushels. Last month’s figure was 210 million bushels and the range of trade estimates runs from 179 to 250 million bushels. Today’s report will deliver the first official new crop balance sheets from USDA. The new crop domestic corn carryout projection is expected to be large. The average trade estimate calls for a carryout projection of 2.094 billion bushels. The range of trade estimates runs from 1.7 to 2.462 billion bushels. The average trade estimate for the new crop soybean carryout projection is 293 million bushels. The range of trade estimates runs from 225 to 371 million bushels. So, those are the key figures to watch for on the report when it is released at 11am. How much or how little and to which direction the official figures deviate from average trade estimates will determine appropriate market reaction post-report. Yesterday, the funds sold 10,000 contracts of corn, bought 2000 contracts of soybeans, and sold 2000 contracts of wheat. They are now estimated to be net short 118,785 contracts of corn, net long 52,990 contracts of soybeans, and net short 126,860 contracts of wheat. This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday. From a chart perspective, July corn finds initial support at the overnight low, 5.7975, followed closely by Wednesday’s low, 5.79, and then the 16-month low charted last Wednesday, 5.6925. Initial resistance is at 5.8425, the overnight high, followed by Wednesday’s high, 5.96, and then the psychological 6.00 mark, which was also Monday’s high. July soybeans find initial support at the overnight low, 14.04, followed closely by the psychological 14.00 level, and then the new 1 ½ month low charted yesterday, 13.8525. Initial resistance is at 14.1675, the overnight high, followed by the two-week high charted on Monday, 14.4675. Opening calls are steady/mixed.
Have a great Friday and an even better weekend.
Good Morning. It is Report Day. At 11am, USDA will release the May WASDE Report. Nearby corn and soybean futures finished the overnight session higher while deferred contracts were steady/lower. July corn was up a quarter of a penny, settling at 5.8250. July soybeans were up 3 ½ cents, settling at 14.09. In the outside markets, as of 7:45am: The US Dollar Index is up 233 points, trading at 102.291. June crude oil is up 30 cents, trading at $71.17 per barrel. Precious metals are all lower. Industrial metals are lower, except copper. The Electronic Mini-DJIA is up 111 points, trading at 33,482. All eyes are on the report at 11am, however, typically after the official May USDA figures are published, traders digest the information and immediately return to trading weather and understandably so. Unfortunately, on the weather front, there are currently no major concerns for the Corn Belt for the rest of the month of May that would inspire a rally and in many areas planting is complete or near complete. On today’s report, minimal changes are expected on the old crop balance sheets. The old crop domestic corn and soybean carryout projections are expected to increase slightly. The average trade estimate for the old crop corn carryout projection is 1.366 billion bushels. Last month’s figure was 1.342 billion bushels and the range of trade estimates runs from 1.242 to 1.472 billion bushels. The average trade estimate for the old crop soybean carryout projection is 212 million bushels. Last month’s figure was 210 million bushels and the range of trade estimates runs from 179 to 250 million bushels. Today’s report will deliver the first official new crop balance sheets from USDA. The new crop domestic corn carryout projection is expected to be large. The average trade estimate calls for a carryout projection of 2.094 billion bushels. The range of trade estimates runs from 1.7 to 2.462 billion bushels. The average trade estimate for the new crop soybean carryout projection is 293 million bushels. The range of trade estimates runs from 225 to 371 million bushels. So, those are the key figures to watch for on the report when it is released at 11am. How much or how little and to which direction the official figures deviate from average trade estimates will determine appropriate market reaction post-report. Yesterday, the funds sold 10,000 contracts of corn, bought 2000 contracts of soybeans, and sold 2000 contracts of wheat. They are now estimated to be net short 118,785 contracts of corn, net long 52,990 contracts of soybeans, and net short 126,860 contracts of wheat. This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday. From a chart perspective, July corn finds initial support at the overnight low, 5.7975, followed closely by Wednesday’s low, 5.79, and then the 16-month low charted last Wednesday, 5.6925. Initial resistance is at 5.8425, the overnight high, followed by Wednesday’s high, 5.96, and then the psychological 6.00 mark, which was also Monday’s high. July soybeans find initial support at the overnight low, 14.04, followed closely by the psychological 14.00 level, and then the new 1 ½ month low charted yesterday, 13.8525. Initial resistance is at 14.1675, the overnight high, followed by the two-week high charted on Monday, 14.4675. Opening calls are steady/mixed.
Have a great Friday and an even better weekend.