Daily Grain Market Update

(AGWeb) – CORN (July) Last Week’s Close:  July corn finished Friday’s session up 2 ½ cents which put futures up 4 ¾ cents for the week, this after trading in a range of 11 ¼ cents.  Friday’s Commitment of Traders report showed that managed money bought 6,162 futures from May 15th-May 22nd.  The net long position for funds is no at 190,935 futures

Fundamentals:  Corn has started the week off on firmer footing, thanks in large part to wheat gaping higher on the Monday night open.  The weekly crop progress report will be released after the close today.  Analysts are expecting corn to have a good/excellent rating of near 70%, this compares with the 65% good/excellent rating we saw last year at this time.  The big-ticket item this week will be on the geopolitical side of things with talks continuing on the North Korean summit, NAFTA, and trade talks with the Chinese.  Looking out over the intermediate term, weather will be a key catalyst as we start to see the crop develop.  As of right now, most areas in the corn belt have had and are expecting more favorable weather.  There are some concerns in the North as excess moisture continues to be a burden. 

Technicals:  The bulls remain in control of the market as we have seen higher highs and higher lows be the trend since the middle of January.  Though we remain optimistic on price, producers should consider becoming a little more proactive on their hedging.  The gap higher is encouraging for the bull camp but we are taking it with a grain of salt.  We often say volume confirms price and the overnight volume is always thin, so the floor open is more telling for us. 

SOYBEANS (July)

Last Week’s Close:  July soybean futures finished Friday’s session up 5 ¼ cents which put them up 44 ¼ cents for the week.  Thanks to the big gap higher last Monday, futures traded in just a 28 ¼ cent range.  Friday’s Commitment of Traders report showed that managed money sold 6,276 futures from May 15th-May 22nd; this puts their net long position at 94,796 futures. 

Fundamentals:  Soybeans gaped higher with corn and wheat to start the Monday night trade but have done little since the open.  We continue to keep an eye on trucker strikes in South America, this doesn’t seem to be a major issue yet but something to note.  Weather will remain important over the coming months as producers round out planting and the crop starts to emerge and develop.  The biggest catalyst this week will be on the geological front as NAFTA talks continue along with the North Korean summit.  We believe the North Korean summit is important because China is a key player in making this work.  If the summit is successful it will be a big win for US/China relations/trade.

Technicals:  The chart took a U-turn last week as prices accelerated through several resistance levels.  The ability for the market to hold strength all week has neutralized the chart and is close to putting the bulls in full control. 

WHEAT (July)

Last Week’s Close:  July wheat futures finished Friday’s session up 14 cents which put them up 26 ¼ cents for the week.  July futures traded in a 42 ½ cent range last week.  Friday’s Commitment of Traders report showed that funds had bought 10,388 futures from May 15th-May 22nd, this puts them net long 8,819 contracts (first net long position in what seems like a lifetime).

Fundamentals:  Wheat futures gaped higher on the Monday night open on continued weather concerns both in the states and abroad.  Hot and dry weather in the plains over the weekend has helped put some premium in the market, but much welcomed rains could be making their way into the forecast by the middle of the week.  Weather in the Black Sea region continues to be hot and dry which has also helped press prices to their highest levels in 10 months.  If weather turns more favorable, expect the premium to work back out of the market.

Technicals:  The move higher this morning needs to be confirmed by volume on the floor open today.  As with the soybean chart, the wheat chart did a U-turn last week as prices moved through resistance levels with relative ease.  The market is trading just above last weeks resistance pocket which comes in from 543 ½-545, this will be key on a closing basis.