(Agriculture.com) – Soybean futures remain higher while corn and wheat have dipped into the red late in the overnight trading session as the trade sharpens its focus on a trio of market factors to start the week, namely Tuesday’s USDA World Agricultural Supply and Demand Estimates and Crop Production reports.
In late overnight-session trading, the nearby corn futures contract has dipped into negative territory after spending much of the session higher, moving 1/2 cent lower at $3.62 1/2 per bushel, while nearby wheat is 1 3/4 lower at $4.79 3/4. Nearby soybeans remain in positive territory, 3 cents higher at $9.79 1/4 per bushel, according to Barchart.com.
The trade is looking ahead to Tuesday’s USDA reports, focusing most on soybean exports, with speculating heading into the reports that they’ll be higher than normal, something that could foreshadow more export demand for beans in the near term, says Brugler Marketing & Management LLC market analyst Alan Brugler.
“On average, traders are expecting USDA to cut projected old crop ending stocks to 360 million bushels on Tuesday, down 10 mbu from April; Some are looking for a bump up in total exports as total commitments are 101% of the previous WASDE forecast, while the five year average for this date is 98% and accumulated exports as a % of total exports are ahead of normal,” he says. “The trade will be watching the crop progress report on Monday, and then the WASDE report on Tuesday. Trade estimates (Reuters) for US ending stocks on August 31 are 1.864 billion bushels, up from 1.827 billion in the April WASDE report.”
Analysts expect corn planting progress in this afternoon’s weekly USDA Crop Progress report to be around 75%, while soybean planting is expected to be around 30%. A wetter weather outlook will likely keep widespread planting progress slow as this week progresses, weather forecasters add.
“Showers are expected to build back across the Plains and western Midwest mid week, which will continue to replenish moisture for wheat, corn and soybeans. The rains then should be most beneficial in Kansas, eastern Nebraska, North Dakota, and northwest-ern Minnesota,” says MDA Weather Services senior ag meteorologist Don Keeney. “However, wetness will continue in the south central Plains. Continued limited rains in the southeastern Midwest will favor remaining corn and soybean planting there. Additional improvements are expected in the northern Plains and northwest Midwest in the 6- to 10-day period.”
Beyond crop weather and Tuesday’s USDA reports, analysts say continued fund-positioning based on values of the grains and other commodities is setting up to send more money into the grains. This week’s chart showing movement of the Deutsche Bank Ag (DBA) Exchange Traded Fund (ETF) index, says Kluis Commodities market analyst and grain broker, is likely at or near a low, and that low typically foreshadows movement of more fund money moving into the grains.
“You can see the major low in January of 2014 at 24.04. From that low, prices rallied up to the major high at 29.40 in April of 2014. From that high prices dropped down to new 7-year lows last week when prices fell to 21.89,” Kluis says of the chart at right. “The chart shows a weekly hook reversal higher. If the DBA can rally and close above the March high at 22.90, that would confirm a major low in commodity prices.”
