AM Comments 05/20/16
Friday, May 20, 2016, 1:05 PM
Submitted by: Dustin Weiner
The markets were higher overnight thanks to a firmer soy complex and weather forecasts shifting wetter. As recently as yesterday morning, most weather models were in agreement that next week planters would have a green light for a large portion of the belt. Well… updated models overnight show precipitation starting in the Western Corn Belt Monday/Tuesday, hitting the Eastern Corn Belt Wednesday/Thursday. While many producers will be wrapped up before the rain Monday – for the acres that don’t get planted this will cause delays. The 7-day cumulative precip map is below.
As I hinted at above, the other friendly input last night was the big rally in soybean meal which exploded into new highs. July meal is trading over 40% higher than it was 30 days ago! I may have said this here before, it sure seems like the entire trade severely underestimated the amount of soybean demand there is in the world. There’s really no other way to say it.
Outside markets... we see that the $US is mostly unchanged this morning after being sharply higher yesterday. The strengthening $US has weighed heavy on the market the last few days (it is at its highest level since March). If the market can shake off the current value of $US (and the $US stays put today), the currently friendly fundamentals (weather, soy demand) should continue to lead, attempting to keep prices firmer. One potential wild card could be the midday weather forecasts which can swiftly add/subtract moisture from the picture for next week. With a ‘weather weekend’ in front of us (and we all know now that weather can change) it could get a little wild as we head into the close.
Corn 2 to 4 cents higher
Soybeans 8 to 12 cents higher
Have a great day!
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