AM Comments 05/18/16
Wednesday, May 18, 2016, 12:05 PM
Submitted by: Dustin Weiner
We saw a reversal of price action overnight as futures opened up firmer, pushing back towards recent highs – only to give this up as this morning we see relatively sharp losses across the board. When looking at the run corn has been on starting last Tuesday (closing… up 12, down 3, up 11, up 2, up 3 and then up 3 yesterday) to see it down a couple today probably isn’t the end of the world. If you are looking for fundamental news for the weaker prices this morning, the weather for the Eastern Corn Belt looks to dry out over the next 7 days (map below) which should allow for planting to resume…
The corn market in general feels like it is in a spot where if something changes the mood (corn loses acres to soybeans, planting delays, etc.) the funds could easily shake things up and decide to own corn (potentially at the expense of soybeans). To give perspective on the funds’ positions, in the COT report last Friday it showed that the funds were long 195k contracts of soybeans while long just under 15k contracts of corn.
Overall for today, while we look to start off lower and potentially stay lower all day – it is hard to imagine that at this stage of the game that the grain/oilseed markets will completely fall out of bed. We have plenty left to learn regarding potential crop size and really, while May weather across the Corn Belt hasn’t been horrible – it also hasn’t been near as great as April. I can’t help but wonder if the market will continue to price that ‘not perfect’ weather in ahead of next Monday’s look at crop conditions and planting progress (or have they done enough already?). Either way, with corn futures pushing back towards highs for the year producers are getting a great chance to get some sales made for both old and new crop corn.
Corn 1 to 3 cents lower
Soybeans 7 to 10 cents lower
Have a great day!
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