Good morning buddies!
Corn (Okay17)357-6 unch
Soybeans (Okay17) 950’6 +four’zero
Chi Wheat (Okay17) 421’zero -‘6
KC Wheat (Okay17) 416’four
Cotton (Z17) 74.77 -.09
Good morning pals
Brutal worth motion yesterday in the feed grains markets (besides oats!) goes to steer the tape this morning however I need to begin with some bullish information in the cotton pits.Exports have been unbelievable yesterday in cotton, previous crop demand is alive and nicely. May cotton touched 80 cents yesterday, virtually breaking into the 81 cent territory. On the open yesterday, May was buying and selling .80 cents beneath July cotton. It is now .74 cents above July. This is a sign hedgers want to concentrate on. I do know the fund story I’ve been pushing is bearish, that is still bearish. But the rally in previous crop right here into supply is a get up name for the shorts. As we push on 75 cents in the brand new crop, I hesitate to do something on the purchase aspect right here. But in case you are hedged in futures that is one thing it’s essential to concentrate on proper now. Buying low cost calls out of the cash to cowl gross sales is one thing I might extremely advocate. Again, timing is necessary. Doing it this second is just not my push, but when yields would disappoint this yr OR if yields would have the indication they might disappoint- I feel we might see a push to 90 or one thing loopy like that. Cotton and cattle have been one of the best ag performing markets during the last yr, I feel its a superb signal for the remainder of Ag however for the shorts in December, watch out. I can be reaching out to speak about this.
Wheat markets took the brunt of the promoting on the CBOT yesterday, a day forward of May choice expiration. Puts, just like the 410 strike in Chicago have been nugatory 2 days in the past, at the moment are in the cash by a number of cents. The manufacturing growth of the final two-three years globally seems to be persevering with, on this aspect of the world at the least. Record shorts at the moment are extra document brief whereas I think about the whole quantity of outright longs in wheat is again to document lows. With a lack of bullish information, fund promoting in all probability continues however I think about we snap again sooner or later. US wheat is reasonable, new crop gives again close to lows in the Black sea. Now just isn’t the time to be bearish, regardless that it feels horrible from a bullish standpoint. Next week is when “price or roll time”.
StatsCan can be out later this morning with their Principle Crop Acreage knowledge which ought to assist proceed the narrative of declining wheat acres across the globe. Despite the decline in acres, there’s actually nothing on the desk but to recommend under development yields are in-store for any of the main exporting nations.
Corn, like wheat has damaged by way of a number of strikes since late final week. We traded north of 370 in May futures, now have been sub 360. With volatility in corn choices as low cost as they have been, the markets have been sure to flush. This is farmer promoting in my opinion. Capitulation by people who’re money strapped and sick of paying for storage. The funds are document brief, so please don’t take this as some bearish rec, however for those who take a look at the entrance month chart of corn- we might fall a bit from right here earlier than we hit late summer time. At this level given the quantity of moisture in the bottom, betting on a drought might be misguided. Corn wants a climate drawback to hold up right here long run, in any other case the elevated previous crop shares are going to proceed to weigh on worth.
Soybeans have hung in in the course of the current promote streak throughout the buying and selling room at CBOT. Soybeans have a unbelievable demand story to lean on and low costs have slowed farmer gross sales. Unlike corn and wheat, soybeans are just about out of farmer arms from an previous crop perspective, which makes these supply durations considerably much less harsh. That stated, yields in Argentina are in all probability going to remain round 56 whereas Brasil bean yields might proceed to rally.
US climate is taking a look at storms this weekend in the southern rising areas (corn in all probability in the bottom), whereas subsequent week we’ll see storms positioned extra northward. I think about we’re going to see some strong progress on Monday (10% anticipated) and much more the next week. Have an awesome weekend.
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