Pre-Opening Comments
May 18, 2012
Shelley Fuerst, Grain Marketing Specialist
 

Weather is acting as the driving force in the grain markets as the hot and dry conditions are persisting with only chances of scattered moisture in the forecast.  Last May until April was the hottest 12-month period on record for the nation with records going back to 1895.

Corn:  3 higher both old crop and new crop
Spreads in the old crop vs. the new crop continue to widen as the old crop will be historically tight before the new crop corn is harvested.  Old crop export sales lagging with sales down 11% vs. the USDA only predicting a downslide of 7%.  Next points of resistance for new crop corn would be considered at 5.38 on the December futures and a break thru that may lead to a 5.59 price level.
 

Soybeans:  4 lower both old crop and new crop
Market spiked a rally yesterday with China buying 480,000 tons of old crop soybeans.  Any significant additional export sales could pull the US ending stocks to extremely tight levels, even though currently the US export sales are down 15%.  Trade is now starting to lower its planted acreage forecast as dry conditions in KS, AR, and MO could reduce double crop prospects. Planted acreage will be reported on June 29.  A growing deficit of corn in China has pushed corn prices higher which could take cropland from soybeans enhancing China’s need to import.  Next points of resistance for new crop soybeans would be 13.25 on the November futures and a close above that could lead us to 13.52.
 

Wheat:  Spring Wheat and Winter Wheat 4 higher
Wheat rallied for the third straight day recovering all of the losses from the previous two weeks.  Trade reacting to the possibility of substantial crop deterioration in the US, Russian and Ukraine crops.  Export sales also lacking in wheat.  HRW harvest progressing with SW Oklahoma having good protein at 12-13% (too good for feed wheat) and normal test weight of 60 lbs, average yields.  KC July broke above its 50 day moving at 663 ½ with relative ease, while Mpls managed to hold support at its 20 day moving average of 758 ¼.