AM Comments 4/30/15
Thursday, April 30, 2015, 8:04 AM
Submitted by: Eric Kist
The grain markets are all higher heading into today’s session, as corn, wheat, and the soy complex have all found some recent support. Primarily, the general thought is that funds are takings profits before the end of the month, buying back some contracts after building sizeable short positions the last several weeks (record short positions in beans and wheat), and that has also prompted some buying due to technical strength. For the first time in nearly a month, soybeans have closed above the 50-day moving average.
Aside from short-covering, the weekly export sales report this morning was also friendly to grains, as sales numbers for corn, beans, and soybean oil were all higher than expected, which should provide a little bit of support in today’s trade. Weekly EIA ethanol numbers were out yesterday afternoon, and there were not many surprises to be found. Production numbers were down 1%, but it is expected that production rates this time of year are artificially low, due to seasonal maintenance. Heading into the summer months, many think that we could see record production ahead for ethanol, as the market is currently giving plants the ability to hedge production and lock in 40-45 cents/bushel margins for the third quarter.
External markets also had some influence yesterday afternoon, and will spill over into today, as U.S. Q1 GDP growth was announced yesterday, and came in at a disappointed 0.2%. Also, monthly Fed comments yesterday suggested a potential interest rake may be further down the road than previously expected. All-in-all, this has continued to put downward pressure on the U.S. Dollar, which has now dropped over 5% in the past week.
Opening calls for today’s trade:
Beans: 2-3 higher
Have a good day!