Headlines:

  • First Notice Day for May grain futures is April 30th.
  • Wheat and corn stumble, but soybean futures break new highs
    Soybean futures stumbled a couple of times on Thursday’s session, but did not fall, as the fund buying that has fuelled their remarkable rally in recent weeks continues unabated. But corn and wheat futures showed less support, breaking from their multi month highs.  “Funds continue to drive the market,” said Jennifer Webster, at CHS Hedging. “The lack of basis strength and commercial interest is verification that the buying is fund money flowing into these markets,” said Darrell Holaday, at Country Futures. “We have no idea when it will end, but when it does, there will be a major correction,” he warned..

Summary:

Producers that have been hoping and praying for a miracle amidst the backdrop of what has been nothing but bearish supply scenarios are the recipients of good favor when the grain markets bottomed on March 31st. The grain markets have seen record volume the past few trading days as fund and spec traders took big profits off the table and producers were able to take advantage of some great cash prices.

Today volatile move was indicative of the frenzied markets that moved up to key resistance and reversed hard off of those levels. May and November Corn traded in 18.75 and 16.50 cent ranges respectively closing the day at the low of the day. The price action is akin to possible major top. Participants did not hesitate in reducing their long positions ahead of the weekend beating what may have been a Friday rush to exit.

Yesterday we warned that November Beans could reach 1020-1025 near-term and it did not disappoint us making a high of 1023.50. May Corn still managed to close in positive territory giving up half of its gains. It finish at the middle of the day’s trading range. November Beans lost 1.75 cent and was weaker closing near the low of the day. In South America the Argentine Soybean harvest has been delayed by heavy rainfall. The Argentine Soybean harvest is only 16% complete compared to last year’s pace of 46% and 32% below the 3 year pace. These concerns are making for reduced production estimates. Given this backdrop of weather risk in South America, a pullback followed by another rally in the Soybean market is not unreasonable.

We have been suggesting that Corn and Wheat are the weaker than Soybean in our assessments and this was evidenced in today’s price action. May and December Corn lost 11.50 and 10.25 respectively and July Wheat surrendered 11 cents. Both of these markets ran up against key resistance today and did not recover. Weather problems in South America will continue to be a driver of the market price action. Volatile move in both directions are to be expected.