May 20, 2016
Grain Marketing Specialist
USDA crop progress report is released Monday afternoon
CORN (Up 2)
Despite the third highest single week export sale this year of 58 mln bushels the market still sold off down nearly a dime Thursday. Outside factors of a stronger dollar due to a possible short term interest rate hike seemed to have the most negative effect on the market. The EPA revised their proposal from 14.5 bln gallons annually to 14.8 bln gallons by 2017. This seemed to be fairly in line with trade expectations. Weather in the Eastern corn belt suddenly looks drier through mid- next week. A rain event looks to develop after that which may be ideal with the predicted warmer temperatures. Nearby support for Jul futures is found at $3.88 with resistance found at $4.005. The next target objectives on December corn are $4.06, $4.09 and $4.20. Below is a look at those target levels over the NC day chart.
SOYBEANS (Up 8)
Beans took the biggest hit on Thursday even with a fairly good export sales number of 20.4 mln bushels. The planters keep rolling across much of the Midwest at record pace as the trade awaits what looks to be a strong weekly progress report on Monday afternoon. Acre shifts continue to be talked about with most guesses expecting an increase of 1.5-2 mln acres in the June 30th USDA report. Argentina production losses are still to be determined but it does sound like harvest has picked back up as they clean up what’s remaining. The recent currency situation developing with the dollar strengthening and Brazilian Real weakening hinders our ability to continue strong export shipments into the summer months. Nearby support for July futures is found at $10.69 with resistance showing up at $10.88.
WHEAT (Minneapolis Up 2, Kansas City Up 3)
Not a lot of fresh news in wheat as the same story continues with harvest on the cusp of starting in Texas and about a week out in parts of SW Oklahoma. Winter wheat is still a sharp discount to spring wheat with the spread still over 80 cents at the moment. The bulls keep talking about potentially too much rain in the South and potential quality issues but the ~50% stocks to use ratio keeps any market swings from moving too much. Export sales reported Thursday were 6.4 mln bushels for old crop with a strong new crop number of 21.1 mln bushels. Nearby support for Minneapolis July futures is found at $5.25 with resistance at $5.43. Nearby support for Kansas City July futures is found at $4.4125 with resistance at $4.6175.