Grain Notes 5/17/19 PM Comments

PM Comments (By Oliver Dion)
Good afternoon. The corn market closed the week on a positive note finishing up today while soybeans were down sharply. July corn was finished up 4.25 to settle at 3.8325 and December corn finished up 1.75 settling at 3.9825. July beans were down 18 to 8.2175 and November beans finished down 17.50 to 8.4725. For the week July corn finished up 31 cent and December was up 26. Even after the sell off today July beans finished the week up 12.5 cents and November beans were up 14 week on week. The wet weather continues to drive the market limiting planting with planting insurance dates around the corner. In outside markets the dollar index is up .12 to 97.98, oil is down 12 cents to 62.75, and the Dow was down 98 points. 

  • With wet weather pushing the market higher July futures climbed above the 100 day moving average of 3.81 spurring some technical buying. December corn pushed to 4.00 and traded there briefly, but could not get past this important psychological mark. 
  • Weather forecast remain wet showing +4 inches of rain in the next 7 days for the western corn belt and below than average temperatures. It does show some relief for Indiana and Ohio which have barely started planting. The insurance date out east is a little later at June 5th for corn.
  • Estimates will be lining up Monday for the planting progress report at 3pm. The historical average for corn planting on May 20th is 81% and last year was 80%. Will we even be able to break 50% planted? That is the big question which leads to the next one of how high prevent plant acres will be? Highest I have seen so far is 6 million acres. In 2013 it was a little above 4 million, but it was easier to make the switch to beans then with beans prices much higher.
  • In the trade war front China made comments on the US being insincere farther pushing the divide wider. China also rejected 2 cargoes of Canadian beans for FM, but their relationship is even more strained with Canada then the US. The US reached a deal with Canada and Mexico to lift tariffs on steel and aluminum in return for those countries to add measures to prevent Chinese steel and aluminum to come into the US.
  • CFTC report shows managed money short 298k corn contracts, 171k soybean contracts, and 81k Chicago wheat contracts. The managed money short actually increased in corn but, it is believed they have been buyers the last 3 days for corn and are now short 235k corn contracts and hold a similar position in soybeans of 170k short. Almost all their short July corn positions are losing money now.
  • From a chart perspective July corn has support at 3.69 and faces resistance at the 200 day moving average of 3.87. December corn has support at 3.88 and faces resistance at 4.00 which we failed to break through today. After 4.00 resistance goes up to 4.05 and the contract high is 4.24. July soybeans have support at 8.0550 and see resistance at 8.4850 and then at 8.75. November beans have support at 8.2750 and see resistance at 8.7150. 

Have a great evening and weekend.