MarketEdge AM Comments
May 23, 2023
(Phil Knuth)
Good Morning. Corn and soybean futures were mixed overnight. July corn finished the overnight session up 6 cents, settling at 5.77. July soybeans were off 3 ¼ cents, settling at 13.38. In the outside markets, as of 7:40am: The US Dollar Index is up 326 points, trading at 103.524. July crude oil is up $1.01, trading at $73.06 per barrel. Precious metals are all lower. Industrial metals are all lower. The Electronic Mini-DJIA is off 63 points, trading at 33,297. It is easy to attribute the recent pop in corn futures to a dry weather forecast for most of the Corn Belt through the next ten days, however, that theory is a bit premature. The extended weather forecast for the month of June calls for normal to above normal precipitation and normal to slightly above normal temperatures. If this weather forecast materializes, it would be pretty much ideal for crop development. Furthermore, this dry weather stretch should allow plenty of opportunity for farmers to wrap up the 2023 planting campaign before the end of the month. The moral of the story is, it is far too early to be Chicken Little and build weather premium into the market over a short dry weather stretch. The crop was planted in a timely fashion and extended weather models call for favorable weather. There just really is no “story” here. Yesterday afternoon, USDA reported that the US corn crop was 81% planted as of Sunday night. This figure is a 16-point advancement from last week, is 12 points ahead of last year at this time, and is six points ahead of the five-year average. North Dakota, the state that has caused traders the most concern, made a ton of progress in the last week. The corn crop in North Dakota was reported to be 32% planted as of Sunday night. Although this figure is still lagging behind the five-year average, it is an impressive 27-point advancement week-over-week. Iowa’s corn crop was reported to be 95% planted. This figure is eight points ahead of the five-year average. Illinois’ corn crop was reported to be 91% planted. This figure is 16 points ahead of the five-year average. As of Sunday night, the US soybean crop was reported to be 66% planted. This figure is a 17-point advancement from last week, is 19 points ahead of last year at this time, and is 14 points ahead of the five-year average. The Iowa soybean crop was reported to be 84% planted. This figure is 18 points ahead of the five-year average. The Illinois soybean crop was reported to be 85% planted. This figure is 27 points ahead of the five-year average. Yesterday, the funds bought 10,000 contracts of corn, bought 10,000 contracts of soybeans, and bought 1000 contracts of wheat. They are now estimated to be net short 92,660 contracts of corn, net long 8820 contracts of soybeans, and net short 133,475 contracts of wheat. From a chart perspective, July corn faces initial resistance at the overnight high, 5.7950, followed by last week’s high charted on Monday, 5.9875, and then the psychological 6.00 mark, which was also the high from Monday, May 8th. Initial support lies at 5.64, the overnight low, followed by 5.50, and then the 18-month low charted on Thursday, 5.47. July soybeans face initial resistance at 13.50, followed by the psychological 14.00 level. Initial support lies at the double-low from yesterday and Friday which is also a 10-month low for the contract, 13.0475, followed closely by 12.99, the 16-month low charted on July 22, 2022. Opening calls are mixed.
Have a great Tuesday.
Good Morning. Corn and soybean futures were mixed overnight. July corn finished the overnight session up 6 cents, settling at 5.77. July soybeans were off 3 ¼ cents, settling at 13.38. In the outside markets, as of 7:40am: The US Dollar Index is up 326 points, trading at 103.524. July crude oil is up $1.01, trading at $73.06 per barrel. Precious metals are all lower. Industrial metals are all lower. The Electronic Mini-DJIA is off 63 points, trading at 33,297. It is easy to attribute the recent pop in corn futures to a dry weather forecast for most of the Corn Belt through the next ten days, however, that theory is a bit premature. The extended weather forecast for the month of June calls for normal to above normal precipitation and normal to slightly above normal temperatures. If this weather forecast materializes, it would be pretty much ideal for crop development. Furthermore, this dry weather stretch should allow plenty of opportunity for farmers to wrap up the 2023 planting campaign before the end of the month. The moral of the story is, it is far too early to be Chicken Little and build weather premium into the market over a short dry weather stretch. The crop was planted in a timely fashion and extended weather models call for favorable weather. There just really is no “story” here. Yesterday afternoon, USDA reported that the US corn crop was 81% planted as of Sunday night. This figure is a 16-point advancement from last week, is 12 points ahead of last year at this time, and is six points ahead of the five-year average. North Dakota, the state that has caused traders the most concern, made a ton of progress in the last week. The corn crop in North Dakota was reported to be 32% planted as of Sunday night. Although this figure is still lagging behind the five-year average, it is an impressive 27-point advancement week-over-week. Iowa’s corn crop was reported to be 95% planted. This figure is eight points ahead of the five-year average. Illinois’ corn crop was reported to be 91% planted. This figure is 16 points ahead of the five-year average. As of Sunday night, the US soybean crop was reported to be 66% planted. This figure is a 17-point advancement from last week, is 19 points ahead of last year at this time, and is 14 points ahead of the five-year average. The Iowa soybean crop was reported to be 84% planted. This figure is 18 points ahead of the five-year average. The Illinois soybean crop was reported to be 85% planted. This figure is 27 points ahead of the five-year average. Yesterday, the funds bought 10,000 contracts of corn, bought 10,000 contracts of soybeans, and bought 1000 contracts of wheat. They are now estimated to be net short 92,660 contracts of corn, net long 8820 contracts of soybeans, and net short 133,475 contracts of wheat. From a chart perspective, July corn faces initial resistance at the overnight high, 5.7950, followed by last week’s high charted on Monday, 5.9875, and then the psychological 6.00 mark, which was also the high from Monday, May 8th. Initial support lies at 5.64, the overnight low, followed by 5.50, and then the 18-month low charted on Thursday, 5.47. July soybeans face initial resistance at 13.50, followed by the psychological 14.00 level. Initial support lies at the double-low from yesterday and Friday which is also a 10-month low for the contract, 13.0475, followed closely by 12.99, the 16-month low charted on July 22, 2022. Opening calls are mixed.
Have a great Tuesday.