Headlines:

  • The May Crop Production, Supply/Demand report will be released on Thursday May 10 @ 11:00 A. M. CDT.
  • Today is First Notice Date for May futures.
  • The EPA has granted a financial hardship waiver to an oil refinery in Wynnewood, Oklahoma owned by billionaire and former President Trump advisor Carl Icahn. The waiver will allow Icahn’s CVR Energy Inc. to avoid tens of millions of dollars in costs related to the U. S. Renewable Fuel Standard program.
  • Soyoil, sugar ‘extremely vulnerable’ to hedge fund short-covering
    Societe Generale extended its cautions over the potential for short-covering sprees in soyoil and sugar after official data showed hedge funds cutting bullish bets on agricultural commodities to a two-month low. Managed money, a proxy for speculators, cut its net long position in futures and options in the top 13 US-traded agricultural commodities, from hogs to cocoa, by 47,280 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows. The selling took the net long – the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall – to 260,496 contracts, meaning that speculators have sold down more than half their net long from a high set in mid-March. And it reflected selling in an array of contracts, driving the net long in grains to a two-month low – and in Chicago livestock to the lowest in five years.
  • Sugar market offers ‘good value’, JP Morgan says, flagging ‘trend exhaustion’
    Sugar prices offer “good value”, JP Morgan said, advising buyers to step in, even as BTG Pactual issued a somewhat more downbeat assessment, forecasting prices in 2018-19 at their weakest in 12 years. Both banks concurred that the worst is over for sugar prices, which as measured by New York raw sugar futures were, at a multi-year low set last week, down 29% so far in 2018. “The good news is that prices may be close to a floor,” Sao Paulo-based BTG Pactual said, heralding revisions to its ratings on shares in cane processors such as Sao Martinho and Adecoagro. JP Morgan said that “recent closes above important technical levels,” such as 11.41 cents a pound for the New York July contract, “signal that a bottom is forming”. “The slowdown in producer selling below 11 cents a pound, and limited investor appetite to add fresh shorts, indicates that the market is approaching trend exhaustion ahead of Monday’s May 2018 contract expiration.”.

 

Summary:

Hedge funds reduced their net longs in both Corn and Soybean futures and Options despite delays to the US Spring sowings program. The selling also derailed a rally in Soybean futures that was riding the coattails of Soymeal after reports of damaged to export facilities at Rosario, Argentina was caused by an accident. Rosario is the top Soymeal exporting region in the country. Corn deliveries were light on this first notice date with only 10 contracts posted against the May futures.

Corn futures closed higher on today in the face of forecasts for rain that probably will further delay planting in the central and northern Midwest. Nearby Soybeans finished 6.50 to 7.75 cents lower. About 5% of the US Corn crop was planted as of April 22 which was well behind the prior five-year average of 14% according to the USDA. The USDA will release its Weekly Crop Progress Report later this afternoon.