Headlines:
- NOPA Crush will be released Monday, May 16th at Noon EST
- The next USDA crop production and S/D report is scheduled for tomorrow May 10th
- Hedge funds hold hefty long position in soy complex ahead of Wasde
- corn slumps ahead of stocks forecast
Summary:
Over the last 3-4 weeks hedge funds have been aggressively moving from a net short to net long position in the grain markets. As of last week, hedge funds are net long at their highest levels in over two years. The size of managed money net long position reached 167,554 contracts in the Soy complex. The funds were not spoked into selling off last week with the net change in Soybean prices only being marginally lower last week compared to the previous week. There seems to have been a little bit of nervousness today ahead of the USDA report tomorrow. July Beans dropped 7.75 cents today and November Beans was off 5.50 cents. July Beans has been posting closed very close to an important trading range 1028 to 1043.75 over the past 7-10 trading days. Trading with strength on either side of this range after the WASDE report looks to have some strong follow through.
All three markets were softer today ahead of the scheduled WASDE report tomorrow. Corn was the weakest of the three grains since US Corn stock levels are estimated to come in all-time record levels. South America is having some drama of their own. The Brazilian President, Dilma Rousseff, offered over 8 billion dollars of low interest loans to farmers. In an effort to gather support ahead of her impeachment vote these loans are targeted at the poorest small and medium sized farmers. Meanwhile, Brazil’s interim lower house Chief Waldir Maranhao called for a new vote on the impeachment of President Dilma Rousseff which came as a big surprise to local markets. July Corn dropped 9.25 cent today and December Corn surrendered 8.75 cents.
Strength in the US Dollar that appears to have bottomed on May 3rd has been applying downward pressure on domestic Wheat prices. The HRW Wheat Tour was showing very strong numbers all of last week also did not help. July Wheat had been holding steady near a key range of 482 to 487 last week. Upon breaking 482 with authority we anticipated that prices would reach 465 at a minimum with a realistic possibility of reaching 450. Today July Wheat touched 453.75 and could very well reach 445 by the end of the week. July weak lost 5.75 cents today.
