** 6:30 AM CST CBOT Prices: July soybeans are up .50 cents at $9.4875, July corn is up .50 of a cent at $3.70 while July Chi wheat is down .75 of a cent at $4.2875.
** AgResource AM Grain & Oilseed Comment: Good Morning! Mixed and little changed is the CBOT with fresh trade news lacking overnight. A long holiday weekend is ahead and traders are closely watching the Central US weather. Limited fieldwork will be completed across the Midwest this week, which makes the final days of May and opening days of June important.
The US model does offer drier weather conditions for the Plains/W Midwest on the weekend and next week before cool/wet weather returns in the 11-15 day period. The E Midwest has fewer dry/warm days and planting progress will struggle in the next 10 days. Thus, the bulls and bears can each point to something in the weather that supports their market stance.
AgResource looks for a two sided trade today with Friday’s forecast keying price direction heading into the 3 day US weekend. Key support rests below $3.66 in July corn, $4.25 in July Chi wheat and $9.42 in July soybeans. This is no place to turn bearish, but one cannot turn bullish until there is clarity on the June weather pattern what its impact will be on crops.
China was hit with its 1st downgrade in debt risk since 1989. Moody’s Investor Services cut China’s debt rating from A1 to Aa3 on a material rise in debt that will burden China’s economy. This does not mean that China will default on any debt anytime soon, it’s just that China will have difficulty piling on more debt to manage the growth in its economy. In fact, China’s President Xi Jinping is calling for a cut in debt leverage. The Yuan vs the USD declined to 6.905:1, which is expected to maintain a slow depreciating trend which could support commodity purchases on speculation.
The US and EU weather model forecasts have differences this morning with the Euro solution much wetter across the Plains and the W Midwest next week. However, the GFS and Canadian model forecasts are drier and not supporting the EU solution. Our forecast lean is to the GFS with just 1.00” of rain or less slated to fall across crop areas west of the Miss River. Moderate to heavy rains will continue across the E Midwest. All areas look to average below normal on temperatures which will limit plant growth. ARC sees the weather forecast as leaning neutral for CBOT values this AM.
In other world ag markets, Sept Paris wheat is down $.25/MT at $166.50, with Dalian Sept corn is up 1 cent/Bu at $5.97 and Dalian Sept soymeal down $2.50/MT at $394.25. Malaysian July palmoil futures closed 41 ringgits lower at 2,699. Palmoil prices are falling in tandem with weakening soft oils.
Not a lot of fresh news this AM. This leaves the market to debate the impact of cool/wet Central US weather on Midwest crops into early June? Additional heavy June rain is unwanted and would become a more important concern for yield. Heading into a holiday weekend, traders want to wait until Friday’s weather forecast before placing new bets. Look for two sided trade today.
