AM Comments 05/31/16
Tuesday, May 31, 2016, 12:05 PM
Submitted by: Dustin Weiner
Looking at the markets this morning we see a mixed start to the week. The soybean complex is once again trying to lead prices higher this morning although it is worth mentioning that they are currently a nickel or so off their highs (made at 1am). The Commitment of Traders report Friday afternoon didn’t present us with much for surprising news: the funds are still long and the commercials are getting shorter thanks to continued waves of farmer selling.
Generally speaking our markets have been dealt plenty of uncertainty that won’t get sorted out overnight (SA production, US acres, China demand, US yield) which have of course added risk premium to our markets. Today we see nothing glaring out there that will change the funds’ strategy as we turn the calendar from May to June. Their positions are in the money and time is on their side as this crop is still in the early stages of development.
Somewhat interesting to watch is that the 2-week forecast looks a little dry for the corn belt. The corn trade has enough wiggle room to shake that off without much worry, but the soybean carryout projections already feel pretty tight.
I personally think a couple weeks of below normal precip in June shouldn’t be anything to worry about… On the bearish side, China announced they are going to be selling soybeans out of their government-owned reserves starting June 1. While normally when they
do this they replace the beans with fresh imports – this time they say they won’t be replacing them. It is of course hard to trust this information, but if what they say is true this could be a little bearish to soybean prices.
Corn steady to 2 cents lower
Soybeans 3 to 6 cents higher
Have a great day!
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