THE OPEN
November beans: 2 1/4 lower
July meal: .90 lower
July soyoil: 1 lower
September corn: 3 lower
September wheat: 2 3/4 lower
The markets opened with unwinding of recent buy bean and corn/sell wheat trade, along with buy soyoil/sell meal trade. Bull-spreading continued to be a feature as July contracts are rolled forward.
At 10:00 export inspections:
beans: 254,939 mt vs. 435,469 mt week ago
wheat: 613.052 mt vs. 564,062 mt week ago
corn: 1,295,845 mt vs. 921,272 mt week ago
Inspections were light for beans and better for grains. For this day, any weakness in lieu of the bean inspections number served to present a short-covering opportunity.
SOY
- The feature in the soy complex was that of short-covering in meal, booking profits in oilshare, as well as continued bull-spreading for nearby bean contracts.
- July soyoil futures traded down towards the evening lows of 2830c, but all in all retained a well bid feeling following crude oil which rallied back over $40.00/barrel.
- Crush values were lower with Sep. trading down to 79.83c/bu while oilshare values traded lower towards 33.12%. Bull-spread activity remained firm with July /August beans trading to an inverse of 2c from 1/4c, while July/Nov traded into 1 1/4c from 5c.
- Meal prices started the day by testing key support at $286.00 but found light short-covering activity and small pricing orders helping to stabilize weaker prices. Meal was the first market to turn higher from lower, then mixed again after the noon hour. Meal spreads narrowed with Jul/Sep trading into $6.20 from $7.50.
- July soyoil prices traded lower, but the break was shallower in nature as charts remain constructive. Technically speaking, July beans contends with trendline resistance today at $8.81, with November beans at $8.85. Funds are slightly long, and extensions above these key areas should trigger more fund buying activity. Prices weakened after the noon hour as some bean bulls took off positions as scattered rains continued.
GRAINS
- Corn prices were lower today as alternating periods of showers will help the crops as they head towards the July 4 key pollination period. Corn also was under pressure as traders booked profits on the weaker run in wheat prices, as chartists assess if there is a wheat bottom nearby.
- A correction in the buy corn/sell wheat spread took Sep. prices from 1.49c to 1.55c. Further rolling corn into Sep. and Dec. contracts continued to tighten up the spreads. July/Sep corn narrowed into 4c from 5c and July/Dec narrowed into 12c from 13 1/4c.
- Export inspections for corn were good, though rains won out for the day as the key bearish ingredient. Sep. corn traded down to trendline and moving averages once again at $3.32, with a drop under $3.30 turning momentum lower.
- Spreads also started to weaken as prices traded downward. Sep. wheat prices firmed but would not call it enough yet to see the overall lows are in. However, if short under $5.00 Sep wheat, it is low enough to warrant some short-covering activity.
AT 12:00 THE MARKETS ARE AS FOLLOWS:
HI LO
Nov beans:1 lower 8.81 1/2 8.77
July meal: .40 lower 287.50 286.00
July soyoil: 14 lower 2863 2831
Sep. corn: 4 lower 3.37 3.32 1/2
Sep. wheat: 1 higher 4.89 4.81 3/4
Nov canola: 1.00 lower 479.50 476.30
OUTSIDE MARKETS
The Dow opened 140 pts higher with crude oil climbing to $40.15/barrel highs. The US dollar weakens to 97.0. At midday, the Dow is up 363 pts after an opening sell-off.
CLOSING COMMENTS
Weather remains the key to prices right now, with a focus on demand as well. Things look wet over the next two weeks, but not everyone is benefitting. Prices still move sideways locked into trading ranges, though would still prefer to go with the buy bean/sell wheat trend for now and look for points of entry to that trade.
Movement is quiet as farmers continue to wait for still higher levels to come either from a weather scare or more China buying activity. End user pricing will probably pick up for corn as recent strength has left some looking for coverage at lower levels. Look for corn breaks to still find support, along with beans. Wheat prices could still be looking for a bottom, and congestion around moving averages without follow-through is a clue that charts could find it.
After today would also look for traders to begin to position- even into a very important June 30 Stocks/Acreage report, usually a market mover. Advertised expectations are for higher bean and slightly lower corn, which could bring about an adjustment when released.
Have a good evening.......
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