SOYBEANS –
US and China trade negotiations are still ongoing. April arrivals of US soybeans into China are up 35% year-over-year. Brazil’s soybean exports into China are down 43% on the year. Last year the number of US shipments into China were unusually small, while Brazil exports into China were unusually large.
Soybeans are estimated to be 66% planted compared to 48% a week ago and 50% a year ago. The average planting pace for this time of year is 53% so planting is moving along at a solid pace this year. Louisiana, Mississippi, and Alabama are leading the way in planting pace.
After rains the past several days, the Buenos Aires Grain Exchange is warning of significant crop loss due to flooding. At least 730k ha of soybeans are yet to be harvested. More rain is expected this weekend to add to the flooding. In the US, rains have hit Kansas, Missouri, Iowa, and western Illinois. In the 6-10 day forecast, rain is expected to continue in the Midwest and South, but below normal precipitation is expected for the Great Lakes region.
Looking at technicals, support is at 1037 and 1046, resistance is 1064.
July Soybeans (ZSN25) settled at 1053 (+2-2), high of 1056-6, low of 1046-2. New crop November Soybeans (ZSX25) settled at 1041 (+4). Cash price is at 1036 (+1-0)
July Bean Meal (ZMN25) settled at 292.6 (+1.5) high of 294.5, low of 290.1
July Bean Oil (ZLN25) settled at 49.50 (+0.06) high of 49.59, low of 48.75
The July Meal to Oil ratio (54.12% Meal – 45.88% Oil)
ZSN25 Moving Averages – (1056) 5-day, (1054) 20-day, (1039) 50-day, (1047-3) 100-day, (1046-0) 200-day
ZSX25 Moving Averages – (1042) 5-day, (1033) 20-day, (1022) 50-day, (1030) 100-day, (1033) 200-day
ZMN25 Moving Averages – (292) 5-day, (295) 20-day, (300) 50-day, (309) 100-day, (314) 200-day
ZLN25 Moving Averages – (49.89) 5-day, (49.41) 20-day, (46) 50-day, (45) 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 454-4 (+7), high of 455-4, low of 444-6. New crop December Corn (ZCZ25) settled at 448-4 (+6-6). Cash price is 454 (+4-0)
Corn is at an estimated 78% planted compared to 62% a week ago and 67% last year. The average planting pace for this time of year is 73%.
Rains are expected to continue in the Midwest and South over the next 6-10 days. The Great Lakes region is expected to see below average precipitation. Open interest rose 6100 contracts yesterday and has been rising every day since the low early last week. We have to wait until Friday’s COT to see whether the rising OI is funds adding to their short, or if we are now beginning to see some short covering.
Looking at the summer high for the past 17 years in the December corn contract, it has occurred:
5 times in May
7 Times in June
5 Times in July
Support is at 439, resistance is 452 in the Dec contract.
ZCN25 Moving Averages – (447) 5-day, (460) 20-day, (468) 50-day, (479) 100-day, (461) 200-day
ZCZ25 Moving Averages – (441) 5-day, (445) 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 546 (+17-0), with a high of 547-4, low of 528-6. September Wheat (ZWU25) settled at 559-6 (+16-0). Chicago Wheat has a cash price of 521-4 (+4-0). July KC Wheat (KEN25) settled at 536-2 (+13-4). July Spring Wheat (MWN25) settled at 597-6 (+12-2)
The wheat market is being supported by crop disease in Kansas and weather conditions out east. China has significant dryness in growing areas. The question is how much of an impact this will have as the grain-filling stage is over or nearly over. In Russia, the Rostov region has issued a farming emergency due to frost allowing farmers to file for compensation due to lost crops. There is also some short covering driving this market higher.
SRW wheat made a low on May 13th and has since rallied 30 cents higher. Chicago wheat has been supported by Ukraine and Russia uncertainty. Yesterday, President Trump and Putin had a phone call discussing a ceasefire and end to the war with the Vatican open to hosting negotiations between the parties. Peace talks were supposed to begin last Friday so the latest update is more-or-less nothing new.
Managed money holds a huge 80k short position on KC wheat from the latest COT report, which is the largest this year. The same holds true for Chicago wheat, managed money is short 126k contracts, which is a record short for this year.
July Chicago wheat support is at 516 & 520, resistance is at 536.
ZWN25 Moving Averages – (531-4) 5-day, (531-7) 20-day, (549-3) 50-day, (565) 100-day, (581) 200-day
ZWU25 Moving Averages – (545-3) 5-day, (546) 20-day, (564) 50-day, (579) 100-day, (594) 200-day
KEN25 Moving Averages – (525) 5-day, (530) 20-day, (563) 50-day, (578) 100-day, (586) 200-day
MWN25 Moving Averages – (582) 5-day, (595) 20-day, (606) 50-day, (615) 100-day, (628) 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.