May 18, 2016
Grain Marketing Specialist
Ethanol numbers to be released this morning.
CORN (Down 2)
Outside factors seemed to strengthen the market on Tuesday as oil was higher and dollar weaker. The planting progress report Monday afternoon was no real surprise at 75% complete. The Eastern corn belt continues to struggle with wet weather which may lead a few more acres from beans into corn if weather holds true. Export demand looks better than expected earlier heading into the summer months. A few private estimates believe we will see weekly exports around the 50 mln bushel mark in the weeks to come versus low 30 mln bushel averages. In world news South Africa imported 56k MT of Argentine corn. Nearby support for July futures is found on the 10 day moving average of $3.845 with resistance at $4.07. Below is a look at the day chart for NC, December corn.
SOYBEANS (Down 10)
Funds continue to buy as we are now around 20 cents away from old highs in July and November futures set a mere week ago. Private estimates continue to funnel in with Dr. Cordonnier thinking we will plant 84 mln acres of beans, 1.8 mln acres more than the USDA figure given last week. Dr. Cordonnier also lowered the Brazilian soy crop to 97 MMT, which is 2MMT lower than the last USDA report. Exports for this time of year seem to be in line with last year, hovering around 10 mln bushels a week. Wet areas in Argentina look to have a good forecast on the horizon, enabling them to dry out a little more over the next week.
WHEAT (Minneapolis Down 3, Kansas City Down 3)
Wheat conditions remain good and ahead of last year as the supply side of the balance sheet remains ample. Stocks to use ratio is still over 50% at this point with chances to increase if weather remains neutral. The bulls remain hopeful that a summer export market will be strong enough to start trimming carryout numbers. Currently, Kansas City July futures are at an 81 cent discount to Minneapolis July futures which has some wondering if the mills this summer will more aggressively pursue winter wheat out of the South versus the excess spring wheat supply in the North.