MarketEdge AM Comments

May 01, 2023

(Phil Knuth)

Good Morning.  Corn futures were lower and soybean futures were higher overnight.  July corn finished the overnight session off a penny, settling at 5.84.  July soybeans were up 2 ¾ cents, settling at 14.22.  In the outside markets, as of 7:40am:  The US Dollar Index is up 106 points, trading at 101.765.  June crude oil is off $1.59, trading at $75.19 per barrel.  Precious metals are all higher.  Industrial metals are also all higher.  The Electronic Mini-DJIA is unchanged, trading at 34,200.  Rapid planting progress, a forecast for the Corn Belt that should allow for another week of planting activity, and outside market influence pressured grain and oilseed futures overnight.  Despite the aforementioned bearish forces, soybean futures managed to trade higher overnight.  This afternoon’s Crop Progress Report is expected to show the nation’s corn crop was between 20% and 25% planted as of Sunday night.  The national soybean crop is expected to be reported to be 15% to 20% planted as of Sunday night.  The forecast for the Corn Belt for the rest of the week calls for mostly dry weather and warming temperatures, allowing for plenty of fieldwork to be accomplished.  Extended forecast models call for a more active weather pattern with warming temperatures.  Traders remain laser-focused on spring US weather.  Some pretty significant geopolitical and economic news over the weekend was essentially shrugged off by the trade.  The conflict in Ukraine continues to escalate, with Russia undertaking a major bombing campaign over the weekend, including targets in the capital, Kyiv.  In the US, the government stepped in and took over First Republic Bank, the 14th largest bank in the country based in California that had been struggling since the collapse of Silicon Valley Bank and Signature Bank earlier this year.  The government orchestrated a buyout to save the bank from complete failure.  JP Morgan Chase has taken over all First Republic assets.  On Friday, the funds bought 2000 contracts of corn, bought 4000 contracts of soybeans, and bought 1000 contracts of wheat.  They are now estimated to be net short 30,060 contracts of corn, net long 87,130 contracts of soybeans, and net short 114,160 contracts of wheat.  From a chart perspective, July corn finds initial support at the overnight low, 5.8175, followed by 5.72, the 15-month low charted on Friday.  Initial resistance is at the psychological 6.00 mark, followed by 6.12, Wednesday’s high.  July soybeans find initial support at the overnight low, 14.15, followed by the psychological 14.00 level, and then 13.9650, the one-month low charted on Friday.  Initial resistance is at 14.2325 and 14.2350, the highs from overnight and Friday, respectively, followed by 14.50, and then 14.77-14.7750, the chart gap from April 20th.  Opening calls are mixed.
Have a great Monday. 

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