June 1, 2017
Morning Market Insight
On Wednesday the market opened above the 200 and 50 day moving average and was up as high as 9 cents at 3.76 and closing off of that at 3.72. We saw some fund short covering early on in the trade and producer selling brought us back off of those highs. The funds are estimated to be short about 200,000 contracts right now. For a sustainable rally there will need to be a supply or demand issue. Remember we have a 2.3 billion bu. carryout. The major things that the trade is looking at, are things such as planted acres, harvested acres, yield, and crop conditions. USDA is projecting yield to be 170.7, and some analysts estimates are coming in lower, from 165 bpa up to 170 bpa.
Beans up 4
Low volume to start the new month in the overnight trade. Beans may have found some support around that 9.12 area. Currently trading at 9.20 on the July contract right now, 9.23 on the new crop November contract. The big question is how many more acres of beans are we going to have this year? 89.5 million acres is the USDA estimate from back in March.
Wheat- MPLS up 6 KC up 1
Continue to hear reports of disease out of KS and OK. The uncertainty of this HRW and SRW crop possibly being smaller than expected and some quality issues helping this wheat market. The Dakotas and Montana’s chances for rain get smaller with the extended forecast and with it missing important moisture early in the season livestock guys have different plans for this crop especially without moisture in the 10 day. On the other hand last year we had a huge wheat crop worldwide. The world has plenty of supply. MPLS wheat did trade above that 5.75 mark today which was the old high from February.