SOYBEANS –
Soybeans closed lower ahead of the holiday weekend. Open interest was up yesterday along with the higher close showing that more new positions were opened which is bullish. Bean meal closed higher yesterday with open interest falling indicating short covering. Yesterday’s close was a monthly high. Meal exports made a 15-week high on yesterday’s report with funds short over 20k contracts on last week’s COT. Bean oil closed slightly higher today, biofuel remains volatile due to biofuel uncertainty.
In South America, Argentina harvest is 74% complete, according to the Buenos Aries Grain Exchange
Exports for the week ending May 15th were 322k mt, analyst estimates were between 250k-700k. This week the majority of exports are for this year compared to last weeks report which had shipments mostly for next year. Exports for the week are at 95.9% compared to the 5-year average at 95.5%. Exports for bean oil and meal were right in between analyst expectations.
Looking at technicals, support is at 1056, resistance is 1067.
July Soybeans (ZSN25) settled at 1060 (-7), high of 1073, low of 1055. New crop November Soybeans (ZSX25) settled at 1050 (-4). Cash price is at 1053 (+5)
July Bean Meal (ZMN25) settled at 296.2 (-2.3) high of 298.6, low of 294.9
July Bean Oil (ZLN25) settled at 49.35 (+0.24) high of 50.30, low of 48.96
The July Meal to Oil ratio (54.61% Meal – 45.39% Oil)
ZSN25 Moving Averages – (1058) 5-day, (1055) 20-day, (1041) 50-day, (1049) 100-day, (1046-0) 200-day
ZSX25 Moving Averages – (1047) 5-day, (1036) 20-day, (1024) 50-day, (1031) 100-day, (1033) 200-day
ZMN25 Moving Averages – (294) 5-day, (295) 20-day, (299) 50-day, (307) 100-day, (312) 200-day
ZLN25 Moving Averages – (49) 5-day, (49) 20-day, (47) 50-day, (46) 100-day, (44) 200-day
The Commitments of Traders report for the week ending May 13th showed soybeans Managed Money traders added 16,537 contracts to their long positions, bringing their net long total to 38,407 contracts. CIT traders were net long 151,837 contracts after increasing their already long position by 4,864 contracts. Non-Commercial No CIT traders were net long 8,949 contracts, having increased their long position by 18,226 contracts. Non-Commercial & Non-Reportable traders added 10,978 contracts to their already long position, bringing their net long total to 55,785 contracts.
The Commitments of Traders report for the week ending May 13th showed meal Managed Money traders were net short 24,716 contracts, moving to a net short position of 102,745 contracts. CIT traders were net long 78,145 contracts after increasing their long position by 1,616 contracts. Non-Commercial No CIT traders were net short 90,785 contracts after increasing their long position by 4,511 contracts. Meal Non-Commercial & Non-Reportable traders hold a short position of 61,809 contracts.
For bean oil, the Commitments of Traders report for the week ending May 13th showed Managed Money traders were net long 67,432 contracts after buying 10,694 contracts. CIT traders were net short 146,624 contracts. Non-Commercial No CIT traders net bought 11,455 contracts, shifting their position from net short to net long with a total of 7,827 contracts. Non-Commercial & Non-Reportable traders net bought 8,173 contracts, raising their net long position to 83,812 contracts.
CORN –
July Corn (ZCN25) settled at 459 (-3), high of 464, low of 455. New crop December Corn (ZCZ25) settled at 450 (-2). Cash price is 469 (+2)
Over the past 17 years, new crop corn makes it’s summer high most often in June, this was true 7 of the last 17 years. Higher prices could be ahead for a number of reasons. Dec corn is still 20 cents below its spring insurance price, which is a target that the corn price often reaches. There’s still plenty of wet acres in the southern parts of the plains that should have lower than projected production. Total yield from the USDA could still be too high and exports may be underestimated. If July corn can break 467 it can see further upside. 467 was the resistance that broke in April, starting the rally to just under 500. 467 was also the key level that corn was unable to breakthrough in October which ultimately led to a huge move lower.
The first NASS crop condition report comes out next Tuesday. The report is expected to show good/excellent near 75% or above as planting has gotten off to a strong start.
Exports for the week ending May 15th were 1.4 mt, which is at 95.8% compared to the 5-year average at 90.7%. Top buyers were Mexico, Colombia, and Japan. Planting pace is 62%, the fastest pace in four years. Yesterday, the EIA, ethanol output dropped to the lowest level in more than a year to an average of 993k barrels a day for the week ending May 9th. Corn use needs to average 100.11 mb per week to meet the USDA’s forecast. U.S. corn has a price advantage over all other countries.
ZCN25 Moving Averages – (457) 5-day, (457) 20-day, (458) 50-day, (465) 100-day, (437) 200-day
ZCZ25 Moving Averages – (449) 5-day, (444) 20-day, (449) 50-day, (454) 100-day, (448) 200-day
The Commitments of Traders report for the week ending May 13th showed that corn Managed Money traders reduced their position by 98,869, bringing their net short to 84,976 contracts. CIT traders decreased their net long position by 24,375 contracts to a long position of 332,423 contracts. Non-Commercial No CIT traders net bought 11,118 contracts, shifting to a net short position of 310,352 contracts. Meanwhile, Non-Commercial & Non-Reportable traders reduced their net long position by 95,320 contracts, leaving them with a net short position of 85,224 contracts.
WHEAT –
July Chicago Wheat (ZWN25) settled at 542 (-2), with a high of 548, low of 538. September Wheat (ZWU25) settled at 558 (-2). Chicago Wheat has a cash price of 542 (+0-2). July KC Wheat (KEN25) settled at 538 (-1). July Spring Wheat (MWN25) settled at 606 (+6)
The wheat market closed below the 50-day moving average for the second straight day. It looks like bulls are starting to lose momentum after a close over the 50-day on Wednesday. The IL Wheat Association’s one day crop tour found yields much better than last year, but they also found some crop disease, like Kansas.
Weather problems continue out east with China’s Henan and Shanxi facing low soil moisture and Russia experiencing frost in the Rostov region. French SRW wheat dropped 2% in good/excellent rating to 71%. Another huge factor in the wheat market is the number of shorts. Funds were record short on the year in Chicago wheat and in KC. Open interest fell almost 20,00 contract in Chicago wheat this week, with OI falling 6,000 yesterday alone.
Wheat exports for the week ending May 15th were above expectations at 868k mt at 19.2% compared to the five-year average at 12.8%. The majority of export sales being new crop sales. The EU is expected to import 9.5 million tons of wheat this year compared to 10.7 million last year as production is beginning to recover.
July Chicago wheat support is at 532, resistance is at 546 and 565.
ZWN25 Moving Averages – (542) 5-day, (531) 20-day, (547) 50-day, (564) 100-day, (580) 200-day
ZWU25 Moving Averages – (556) 5-day, (546) 20-day, (562) 50-day, (579) 100-day, (593) 200-day
KEN25 Moving Averages – (535) 5-day, (528) 20-day, (558) 50-day, (576) 100-day, (585) 200-day
MWN25 Moving Averages – (598) 5-day, (595) 20-day, (605) 50-day, (615) 100-day, (627) 200-day
The Commitments of Traders report for the week ending May 13th showed that Managed Money traders in the wheat market were net short 126,895 contracts, having increased their short position by 13,161 contracts. Wheat CIT traders reached a long position of 37,016 contracts, though they increased their long position by 2,469 contracts. Non-Commercial No CIT traders were net short 115,529 contracts after net selling 11,369 contracts. Non-Commercial & Non-Reportable traders were also net short, holding 119,198.