THE OPEN

May beans:  15 higher

May meal:  3.40 higher

May soyoil:  1.08 pts higher

May corn:  6 higher

May wheat:  4 1/4 higher

The markets opened as called with trends continuing to show stronger oilshare values and higher bean trade.  Inverses strengthened today with front month values gaining.  Chicago wheat gained on KC wheat.  Though prices started on a firm note, the lack of volume and upside follow-through resulted in prices giving back some of the morning gains for corn and beans, with new crop prices weakening, particularly for corn.

SOY

• The major feature in the soy complex was that of soyoil gaining on meal, sending July oilshare back over 39.0%.  Stronger crude oil prices underpin soyoil along with strong basis levels and higher palm.  Meal defers to soyoil again, both technically and fundamentally with the story of biofuel strength vs. continuing ASF reports backing each side of trade.   Crush traded to 58.85c/bu, as processor basis bids have been strengthening.  
• May soyoil values trading strongly back towards the 55c level from prices that had pushed over 53c this morning.  The theme of strong soyoil lent support once again to beans, where funds remain long and appeared to be adding given the market strength gains over $14.00.  July/Nov bean inverse pushes up to 1.44 1/2c from 1.36 1/2c in strong trade, while May/July trades from a 9c inverse from lows of 5 1/4c.  July/Dec meal inverse firms to $18.00 on bargain -hunting and short-covering, after prices dropped to $12.50.  At midday, prices for meal head lower, but soyoil still remains well-bid with beans a weak follower.  
• November bean prices congest on the charts with a possible trading range low of $12.45 towards recent highs of $12.85.  Prices still remain fairly close to highs posted after the March 31 report, which is more constructive than not, implying that higher prices could still be tested sooner rather than later.  May beans remains a range-bound affair.

GRAINS

• The major feature in grains was that of higher Chicago wheat vs. weaker KC, while December corn values lost to May.  More rains are forecast for the southern plains this week, with light to locally moderate showers.  There will not be showers forecast for the southwestern areas, which will stress developing winter wheat.  
• Several weather systems are also due across the northern plains this week. In the crop progress report, ratings for winter wheat were poorer than expected dropping to 53% good /excellent, with Texas, Colorado, South Dakota and Nebraska crops struggling.   
• May corn prices gain on December, with the latter finding resistance as weather conditions for now are benign.  May/July corn trades from 13c up to 15 1/4c, while July/Dec trades from 51c up to 57 3/4c. May Chicago wheat prices remain firm into midday, but Kansas City wheat edges lower trending towards the lowest end of trade at $5.53.  
• At midday, funds seem to be liquidating some of their corn positions on the inability to find upside follow-through on price rallies.  As for the Egyptian tender for wheat, the lowest offers were from Russia, Romania, and Ukraine. 

AT MIDDAY THE MARKETS ARE AS FOLLOWS:

                                                                    HI                         LO

May beans:  8 higher                              14.31                     14.12 1/2

May meal:  .50 higher                             411.80                    405.40

May soyoil:  1.06 pts higher                   54.63                     52.83

May corn:  1 higher                                 5.61 1/2                 5.52 1/4

May wheat:  3 higher                               6.27 1/2                 6.15 1/2

May canola:  18.10 higher                       792.80                   760.60

OUTSIDE MARKETS

The stock market is down 40 pts at the open, with crude oil trading up to $60.90/barrel and the US dollar trading to 92.37.  

CLOSING COMMENTS

The market is adjusting in front of Friday's April WASDE report.  This report will focus on the old crop balance sheet with a look at overall demand.  Bean and corn exports could be adjusted higher, as traders also look at bean imports.  The record for US bean imports was in 2013/14, when the US imported 71.7 mln bushels.  

Technically the market corrections to the downside seem to be over, still leaving prices open to exploring new contract highs placed last week, though admittedly for the day the markets appear a bit "tired".  Weather will have the final say.  As far as corn, it is hard to keep prices up when corn is going into the ground, but once planted would look for prices to trend higher as tighter carry-outs imply that we have to have an ideal growing season to satisfy demand.  And as long as carry-out numbers are this tight, (and could get tighter still), good breaks should be there to own, price, or cover a short for the long term.  

Trading ranges for now:

May corn:  $5.40-$5.85, own or price good breaks

May wheat:  $5.90-$6.35, would sell a rally

May beans:  $14.00-$14.50, would own a good break

May meal:  $395.00-$425.00, would be patient if needing to price, but looks like a base has formed from $395.00-$400.00

May soyoil:  52-56c, own breaks

FYI DEPARTMENT

Cordonnier estimated corn plantings from 92-93 mln acres, and beans from 89-90 mln.   Brazil corn/bean production  came in at 105 mmt and 133 mmt, respectively.  Argentina's corn/beans were estimated at 46.0 mmt and 45.5 mmt, respectively with a bias moving neutral to lower. 

The EIA forecasts US regular retail prices will average $2.78/gallons this summer vs. $2.07 year ago, as more people begin to travel with more vaccine distribution.  

 

TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America