Headlines:
– THE NEXT CONAB REPORT WILL BE RELEASED ON JUNE 9TH
– THE USDA WILL RELEASE THEIR MONTHLY SUPPLY AND DEMAND REPORT NEXT FRIDAY, JUNE 10TH AT NOON EST
– BOOMING SUGAR MARKET AT RISK OF FUND SELL–OFF, WARNS RABOBANK NA
HEAVY FUND ACTIVITY HAS LEFT SUGAR MARKETS VULNERABLE TO A SUDDEN SELL–OFF, EVEN AS FUNDAMENTALS TURN MORE SUPPORTIVE, RABOBANK WARNED. THE BANK SUGGESTED THAT “MARKET SENTIMENT HAS MOVED WAY AHEAD OF THE FUNDAMENTALS,” DESPITE INCREASING ITS EXPECTATION OF NEXT SEASON‘S SUGAR DEFICIT, THE EXTENT TO WHICH SUPPLY WILL OUTPACE DEMAND. A SHIFT IN PRODUCTION COULD ENCOURAGE A “RUSH FOR THE EXIT” OF A HEAVILY BOUGHT MARKET, THE BANK SAID. IN TWO MONTHS, FRONT MONTH SUGAR FUTURES IN NEW YORK HAVE CLIMBED SOME 41%, FROM BARELY OVER 14 CENTS A POUND, TO THE CURRENT SESSION‘S HIGH OF 19.74 CENTS A POUND, THEIR HIGHEST LEVEL SINCE 2013. “WITH THE CURRENT SENTIMENT, THE MARKET IS ONE SHOCK AWAY FROM BREAKING THROUGH THE 20 CENTS A POUND LEVEL,” ACCORDING TO RABOBANK.
Summary:
Gold futures touched new highs today as the greenback slumped a bit amidst declining expectations that the Fed will raise rates at the June 14-16 meeting. We have lots of reports on deck for the tail end of this week and the beginning of next week. It is starting to look like the chances of a rate hike are being priced out of the market with both the equity and metals markets rising.
The combination of a weaker US Dollar, water damage to the French Wheat crop Managed Money short covering have had a three pronged effect in lifting Wheat futures prices. July and December Wheat both climbed 8.50 cents today. Corn also finished in positive territory but was well off of its intraday highs at the close giving up about 2/3rds of its intraday move. Both July and December Corn were up 1.25 cents on the day. Soybeans continue to maintain a torrid pace. July Beans were up 39 cents and November Beans added 34.50 cents.
Managed Money have really taken the bull by the horns and has been bolstering the Soybean prices ahead of the CONAB and WASDE reports tomorrow and Friday. It was reported that China imported 7.66 million metric tons of Soybean in May compared to 7.07 million metric tons in April. The jump was almost 8%. Already China has imported 31 million metric tons of Soybeans this marketing year which is a 31% jump from last year.
Crude Oil futures continue its upward march closing near the highs of its trading day. The July contract closed at 51.15 and is only about two dollars shy of our minimum price objective of 53.
