$ Index Losses Could Drive Grains Higher Again Today
A higher start is indicated in all pits by overnight gains, roughly 10-15 wheat, 5-7 corn and 15-20 beans. Malaysian palm oil gained 65 ringgit today and the Dalian, China grain market reopened with strong gains in all pits after being closed for a holiday Thur-Fri. The $ index is lower again this am. Losses in this index Friday helped drive grain prices higher and could easily do so again today. Crude oil and the equity markets are posting strong gains this am, which should provide further support for the grains. Strength in these outside markets is thought to suggest the US and world economies are recovering, which should boost demand for grain.
The funds appetite for grains continues to grow, illustrated by the continued gains in open interest: up 6000 each Friday in wheat and beans, 15,000 higher that day in corn. This continuing increase in fund buying helped lift wheat prices 14% in May with corn and beans up 7%. There was talk last week that China had cancelled some cargoes of US beans and that talk continues this am with Chinese traders saying 2-3 cargoes, about 110-165,000 tonnes of beans, was sold back into the US market following the recent steep price rise. Note that despite this talk, bean prices still jumped sharply overnight, suggesting this cancellation talk was already discounted by the market.
South Korea was in the market for 100,000 tonnes of optional origin meal but they cancelled the tender due to too high offered prices.
The weekly crop progress report this afternoon is expected to show corn planting of roughly 92-94% vs about 98% average. Bean planting is tentatively expected around 65-75%. The initial condition rating for corn is expected this afternoon but it is still too early for beans.
Technicals: The daily bar charts (high, low, close) still look very bullish, especially for wheat and corn, both of which made new high closes for the move. Oil, the one market that had a downward slanting or bearish chart pattern, had a huge rally Friday due to massive unwinding of meal/oil spreads, making the oil chart look bullish if Friday's rally can be sustained today.
Rain in northern Argentine wheat areas was welcome over the weekend but dry weather prevailed in the south and the forecast calls for mostly dry weather across the wheat belt the next 7-10 days, stressing the crop there. More rain would be increasingly welcome in China's main corn and bean growing regions, including the big bean province of Heilongjiang, after a drier than usual May. Welcome rain is forecast in parts of Australia's wheat belt the next few days, especially New South Wales state.
The US northern plains spring wheat belt will remain mostly dry this week, allowing late planting to proceed. The Midwest will see up to 1.5" of rain in the west the next few days with the second half of the week generally dry, helping keep crops in good shape. The eastern half of the belt will see up to 1.5" of rain today-tomorrow, slowing planting efforts further. Dry weather is forecast the second half of the week. ---Vic Lespinasse
The funds appetite for grains continues to grow, illustrated by the continued gains in open interest: up 6000 each Friday in wheat and beans, 15,000 higher that day in corn. This continuing increase in fund buying helped lift wheat prices 14% in May with corn and beans up 7%. There was talk last week that China had cancelled some cargoes of US beans and that talk continues this am with Chinese traders saying 2-3 cargoes, about 110-165,000 tonnes of beans, was sold back into the US market following the recent steep price rise. Note that despite this talk, bean prices still jumped sharply overnight, suggesting this cancellation talk was already discounted by the market.
South Korea was in the market for 100,000 tonnes of optional origin meal but they cancelled the tender due to too high offered prices.
The weekly crop progress report this afternoon is expected to show corn planting of roughly 92-94% vs about 98% average. Bean planting is tentatively expected around 65-75%. The initial condition rating for corn is expected this afternoon but it is still too early for beans.
Technicals: The daily bar charts (high, low, close) still look very bullish, especially for wheat and corn, both of which made new high closes for the move. Oil, the one market that had a downward slanting or bearish chart pattern, had a huge rally Friday due to massive unwinding of meal/oil spreads, making the oil chart look bullish if Friday's rally can be sustained today.
Rain in northern Argentine wheat areas was welcome over the weekend but dry weather prevailed in the south and the forecast calls for mostly dry weather across the wheat belt the next 7-10 days, stressing the crop there. More rain would be increasingly welcome in China's main corn and bean growing regions, including the big bean province of Heilongjiang, after a drier than usual May. Welcome rain is forecast in parts of Australia's wheat belt the next few days, especially New South Wales state.
The US northern plains spring wheat belt will remain mostly dry this week, allowing late planting to proceed. The Midwest will see up to 1.5" of rain in the west the next few days with the second half of the week generally dry, helping keep crops in good shape. The eastern half of the belt will see up to 1.5" of rain today-tomorrow, slowing planting efforts further. Dry weather is forecast the second half of the week. ---Vic Lespinasse
posted by InsightPublishing at
12:30 PM
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