SOYBEANS –
Soybeans made a big swing lower today due to weather. Weather lately has been good for early development. The soybean oil market, at its 1 ½ month low, is also dragging soybeans down. The oil share is working lower, and as a result soybean oil is lower while soybean meal trends higher. Soybean meal has been beaten up for some time now and is starting to look better. It would still be surprising to see soybean meal go above 300 in the immediate future. The forecast for June is showing that drought conditions will likely be avoided. Treasury Secretary Scott Bessent said that trade talks with China have stalled, following the meeting with Switzerland a few weeks back.
Looking at technicals, support is at 1034, resistance is 1059.
July Soybeans (ZSN25) settled at 1041 (-10), high of 1046, low of 1035. New crop November Soybeans (ZSX25) settled at 1026 (-10). Cash price is at 1037 (+3)
July Bean Meal (ZMN25) settled at 296.3 (0.1) high of 298.9, low of 295.6
July Bean Oil (ZLN25) settled at 46.89 (-1.50) high of 47.81, low of 46.43
The July Meal to Oil ratio (55.83% Meal – 44.17% Oil)
ZSN25 Moving Averages – (1053) 5-day, (1055) 20-day, (1043) 50-day, (1050) 100-day, (1046) 200-day
ZSX25 Moving Averages – (1040) 5-day, (1039) 20-day, (1026) 50-day, (1032) 100-day, (1033) 200-day
ZMN25 Moving Averages – (295.9) 5-day, (294.8) 20-day, (297.9) 50-day, (305.9) 100-day, (312.2) 200-day
ZLN25 Moving Averages – (48.61) 5-day, (49.19) 20-day, (47.81) 50-day, (46.52) 100-day, (44.65) 200-day
The Commitments of Traders report for the week ending May 20th showed soybeans Managed Money traders sold -25,753 contracts to their bringing their net long total to 12,654 contracts. CIT traders were net long 157,869 contracts after increasing their already long position by 6,032 contracts. Non-Commercial No CIT traders were net short -18,873 contracts, having increased their short position by -27,822 contracts. Non-Commercial & Non-Reportable traders net position was 31,510.
The Commitments of Traders report for the week ending May 20th showed meal Managed Money traders sold -4,721 contracts, moving to a net short position of -107,466 contracts. CIT traders were net long 76,190 contracts after decreasing their long position by -1,955 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 – 64,844 contracts.
For bean oil, the Commitments of Traders report for the week ending May 20th showed Managed Money traders were net long 57,309 contracts after selling -10,123 contracts. CIT traders were net long 138,397 contracts. Non-Commercial No CIT traders net sold -6,751 contracts, to a net with a total of -97,536 contracts. Non-Commercial & Non-Reportable traders net bought 71,573 contracts.
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CORN –
July Corn (ZCN25) settled at 444 (-3), high of 449, low of 443. New crop December Corn (ZCZ25) settled at 438 (-2). Cash price is 453 (-4)
The corn market traded lower again today. Solid rains have been beneficial for early development in corn. A drought in June looks unlikely overall. There is dryness in parts of Nebraska and parts of northern Illinois and Indiana but crop conditions should improve with time. Argentina has a price advantage over U.S. corn exports by $0.20 cents.
Ethanol average daily production for the week ending May 23rd averaged 1.056 mb, up 1.9% over last week. Ethanol production is still down 1.1% from last year. Ethanol’s five-year average is 0.976 mb per day. Corn use for the week was estimated at 106.54 mb. The average daily production needs to be 99.66 mb per week to reach the USDA’s marketing year forecast at 5.500 bb.
Looking at seasonal trends:
Corn was higher June 1st through June 10th 7 of the last 10 years.
However, taking a short position in December corn on June 10th and selling June 29th was profitable the last 13 out of the last 15 years.
Support 442, Resistance 457, 468 in July corn.
ZCN25 Moving Averages – (452) 5-day, (452) 20-day, (466) 50-day, (478) 100-day, (462) 200-day
ZCZ25 Moving Averages – (444) 5-day, (443) 20-day, (448) 50-day, (454) 100-day, (448) 200-day
The Commitments of Traders report for the week ending May 20th showed that corn Managed Money traders reduced their position by -18,234, bringing their net short to -103,210 contracts. CIT traders decreased their net long position by -19,329 contracts to a long position of 313,094 contracts. Non-Commercial No CIT traders sold -3,408 contracts, to a net short position of -189,799 contracts. Meanwhile, Non-Commercial & Non-Reportable traders net short position was -97,678.
WHEAT –
July Chicago Wheat (ZWN25) settled at 534 (unchanged), with a high of 538, low of 531. September Wheat (ZWU25) settled at 548 (-0.50). Chicago Wheat has a cash price of 534 (+3). July KC Wheat (KEN25) settled at 533 (+1). July Spring Wheat (MWN25) settled at 624 (+8)
Spring wheat led the wheat trio higher today. HRS wheat is at 29% drought, unchanged for the week. Last year, HRS wheat was under 3% drought. Winter wheat area under drought fell 5% this week to 16% under drought. The Great Plains will see additional rains next week, which should help improve crop conditions. In Europe, Ukraine HRS seeding is nearing completion, while French winter wheat conditions fell 2% on the week.
HRS conditions are at 45% good/excellent, well below expectations. HRS wheat ratings are tied with 2021 as the second lowest of the last 40 years, with 1988 being the worst year. In 1988 and 2021 yields were cut heavily due to drought. At current pace, HRS wheat plantings are set for a 55-year low.
July Chicago wheat support is at 525, resistance is at 536, 548.
ZWN25 Moving Averages – (534) 5-day, (532) 20-day, (543) 50-day, (563) 100-day, (578) 200-day
ZWU25 Moving Averages – (549) 5-day, (547) 20-day, (558) 50-day, (578) 100-day, (592) 200-day
KEN25 Moving Averages – (530) 5-day, (528) 20-day, (552) 50-day, (575) 100-day, (583) 200-day
MWN25 Moving Averages – (609) 5-day, (598) 20-day, (604) 50-day, (615) 100-day, (626) 200-day
The Commitments of Traders report for the week ending May 20th showed that Managed Money traders in the wheat market were net short -80,162 contracts, having decreased their short position by 18,002 contracts. Wheat CIT traders reached a long position of 39,071 contracts, increasing their long position by 2,055 contracts. Non-Commercial No CIT traders were net short -99,289 contracts after net buying 16,24- contracts. Non-Commercial & Non-Reportable traders were net short -105,792.
Hans Schmit
Account Executive Walsh Trading
Direct 312-765-7311
Toll Free 800-993-5449
Fax 312 256 0109 fax
hschmit@walshtrading.com