Headlines:
- Grain Markets will be closed on Monday, May 30th in observance of Memorial Day
- wheat soars as funds cover shorts
- UK wheat exports to hit-seven year high
UK wheat exports will soar 42% this season to a seven-year high, helped by a late-season pick up in shipments, limiting the boost to stocks from two successive bumper harvests, official data showed. Defra, the UK farm ministry, in its first forecast for domestic wheat shipments in 2015-16, which ends next month, pegged them at 2.75m tonnes. Shipments at that level would be the highest since 2008-09, and would limit to 2.50m tonnes UK wheat stocks at the close of the season – a rise of only 74,000 tonnes year on year, and a forecast well below those being voiced earlier in the season.
Summary:
Corn sales were very strong for the old crop, topping analysts’ expectations. The new crop was just shy of the low end of expectations. The old crop figure came in at the 4th largest for the marketing year with commitments coming in at 95% of the USDA total.
Soybean sales were near the top of analyst expectations for the old crop but well below the low end of expectations for the new crop. Soybean commitments crossed the 100% mark for USDA estimates with only 75% of the marketing year completed.
Wheat is approaching the end of its marketing year and with that came some cancellations causing its sales numbers to come in negative for the old crop. The new crop number came in a little bit higher than the low end of expectations. Wheat commitments were at 97% of the USDA total with only a couple weeks left in the marketing year.
In spite of a bearish narrative Wheat futures posted a massive rally today on the heels of massive short covering on the part of managed funds. Wheat had not seen the strength that Corn and Soybeans has enjoyed over the past few weeks. Upon returning to key resistance levels after failing to reach support below 455, it looks like some short Wheat spreads are being unwound. The weak sales report today also did not help. With the move up to resistance protecting profits ahead of the long weekend should not come entirely as a surprise.
Soybean futures continue to struggle at key resistance. A recent breakout of a bullish flag pattern has not had strong follow through as of yet. Not to say that it would have follow through but it is important to watch out for a false break as well. July Beans finished the day down 6 cents and November Beans shed 4.75 cents.
Corn continued to rise as the July contract rallied another 4 cents and the December contract was up 1.560 cents. Corn is not overbought and is very close to resistance. Existing long positions would be wise to trail stops behind this market action.
