All Members: Mid-day

Midday Update

May 26, 12:44 pm | Mid-day Commentary

** It has been a mixed session of trade at the CBOT with corn, soybeans and wheat futures widely mixed in tepid volume. Soybeans have pushed to new monthly lows while the grains firm on spread unwinding. Traders are well aware of the large net fund short position that already exists in corn and are cautious with any new short positions. Funds have been bigger traders (than expected) heading to the holiday weekend. A mixed close is expected by AgResource.  ** CBOT brokers estimate that funds have bought 5,500 contracts of wheat and  9,000 contracts of corn, while selling 5,100 contracts of soybeans. In soy products, funds have sold 2,000 contacts of soymeal and 3,000 contracts of soyoil. The soyoil…

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Midday GFS Forecast Cooler/Wetter in 10-15 Day Period; CBOT Bounces

May 25, 12:15 pm | Mid-day Commentary

** A firmer CBOT start could not be sustained amid an improved Central US weather forecast. The GFS/EU models both offered reduced rainfall and warming temperatures in the extended range which has sparked some modest selling this AM. The weakness in crude oil has also spurred macro selling as the bulls bank profits following long anticipated news that OPEC was going to maintain their existing production cuts for another 9 months.   Soybeans have been the downside price leader as domestic Chines meal demand slows which could worsen their already negative crush rates. July soy futures have fallen below last week’s low with the next downside price target being $9.30, the April lows. Spot CBOT soybeans have held above $9.20-9.30…

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CBOT Mixed in Low Volume Trade; Awaiting Midwest Weather

May 24, 11:54 am | Mid-day Commentary

** Low volume and little changed is the CBOT this AM. Corn, soybeans and wheat have all traded either side of unchanged with traders unable to decipher a trend. Most in the industry are waiting for June weather to better delineate where prices are heading?   Crops look rough in the E Midwest as they struggle with too much rain and cool temps. Conditions are far better in the W Midwest, and N Plains and Delta. Tuesday’s US corn condition ratings will be below the past few years, but such ratings have little correlation to the final yeild. Thus, it’s the June weather trend that will be key.   Internationally, Black Sea, Canadian and European weather forecasts are alright with…

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CBOT Weaker At Midday on Drier W Midwest/Plains Forecast

May 23, 12:24 pm | Mid-day Commentary

** CBOT grain and soy values are weaker in continued slow volume. Monday’s buyers are Tuesday’s sellers as market choppiness prevails. The AM bearishness is tied to the ability of US farmers to seed around frequent heavy rains and keep up with the 5 year average planting dates. The ’17 seeding progress has been surprisingly good, one has to wonder how fast US farmers could seed a crop with a normal spring weather? Agronomists and commercial elevator contacts both argue that a considerable amount of corn will need to be replanted, but that data will not be caught within any NASS weekly state report.     It will be June weather that determines the next lasting trend at the CBOT….

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Cash Corn Moving in the West; Volume Poor on the CBOT Rally

May 22, 12:15 pm | Mid-day Commentary

 ** The morning has all been about adding weather premium to crop prices as cool to cold temps, and lite rains continue across the Midwest for most of the week. The market is becoming concerned that Central US crops will be latent in development as the calendar rolls forward to June. Trade volume has been poor!   US corn ratings are expected to well below last year and the 5 year average when they are released next Tuesday. With portions of the Midwest corn crop looking ragged/yellow, it’s unlikely that the CBOT can sustain a downtrend until more is known about the June weather pattern?   The big reason why last year’s corn/soy yields were so strong is that the…

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Brazilian Real Rallies; Funds too Short?

May 19, 12:35 pm | Mid-day Commentary

** A stronger Brazilian Real and the worry of fund managers that they may be too short ahead of the heart of the growing season has lifted CBOT corn, soy and wheat futures at midday. The volume of trade has been sizable with over 140,000 contracts of July corn and 75,000 contracts of July corn changing hands. The market has a bullish tone as traders argue that the worst may be over in terms of immediate headline event for the Presidents of the US and Brazil.  ** Brazilian farmers have shut down new cash soybean and corn sales today as the Brazilian real has rallied 2.7% to 3.28:1. As many as 3 MMTs were sold yesterday as the Brazilian real plummeted…

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Brazil Farmers Sell on an 8% fall in the Real; Central US Weather Cool/Wet

May 18, 12:07 pm | Mid-day Commentary

** Sharply lower CBOT soy values have been the theme this AM with July soybean futures falling to test key support at $9.40-9.45. Corn has followed soy, with wheat trading both sides of unchanged.   The volume of CBOT trade has been active via a corruption charge that is evolving against Brazilian President Temer. The charges of corruption (against Temer) will likely to take down his position in office in coming weeks. The dramatic change in Brazilian politics and what it means for job’s legislation to help their economy has dropped the value of the Brazilian real by nearly 8% this AM with its value falling back to December 2016 levels at 3.38:1 USD.   The odds are high that…

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Markets Stay Higher; Egypt Buys US Wheat

May 17, 12:04 pm | Mid-day Commentary

Higher has been the morning in Chicago, led by KC wheat amid surprising revelations from Egypt’s tender released Tuesday afternoon. The soy complex has followed for the most part, but grain market short covering is the feature. Egypt secured a massive 295,000 MTs of wheat from the US, Russia, Ukraine and Romania. The lowest offer made to Egypt was US HRW at $185/MT (two cargoes), which further implies that the Gulf wheat market has become rather competitive following the recent break – and ARC hears that lower protein HRW basis at the Gulf is declining. Just as interesting, though, are offers made from other exporting countries. Russia offered 240,000 MTs at prices ranging from $198-205/MT, which suggests old crop price…

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Export Demand for US Soybeans; Cold Last half of May for Central US

May 16, 12:02 pm | Mid-day Commentary

** It has been another mixed and low volume morning at CBOT as corn/wheat trade either side of unchanged while soybeans hold in the green on improved US export demand for old crop. The volume totals at midday are slightly improved from Friday and Monday, but still low historically speaking for mid May. This is the time of the year when volume/activity should be gaining ground based on yield risk heading into summer. This year, such risks appear to be diminished and the only selling appears to be in Kansas City wheat where funds continue to exit a stale long position. Our bet is for a mixed CBOT close.  ** ARC notes that although much of the US corn crop…

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Grains Sag while Soy Holds Following NOPA Data

May 15, 12:06 pm | Mid-day Commentary

 ** Stronger soy and weaker wheat is the theme of the AM CBOT trade with volume remaining constrained by a lack of fresh news. The rally in soy is based on a strengthening of the Brazilian real and a continued rally in cash US soyoil values. US cash soyoil prices have been rising on strong domestic demand – and the potential for enlarged US biodiesel demand as Argentine/Indonesia soyoil are shut out due to rising US tariffs.   ARC has no fundamental reason for the drop in wheat other than fund selling. The world cash wheat markets are largely steady and directionless. It’s the month of June and the first half of July that are the most important to Black…

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