For many U.S. grain producers and traders caught heavily long in grains, Monday’s selling rout was part of a painful about-face after prices rallied to drought-inspired highs earlier this month. May contracts of corn, soybeans, meal, and all three wheats were sharply lower Monday with a wee bit of rain in Kansas and northern Buenos Aires.
Midday: Wheat and soybeans lead double-digit-lower midday trade.
Corn trade is 5 to 6 cents lower at midday to open the week with trade seeing spillover pressure from the weak soybean and wheat trade. Another big jump in the fund length seen on the Friday afternoon CFTC report and some triggered chart selling is also noted for our lower midday action.
Ethanol margins remain positive with spring driving season approaching, bolstering blender demand. Double-crop areas in Brazil look to build some moisture in the coming days; with early harvest starting in Argentina.
The USDA announced 206,000 metric tons sold to Japan, and 115,000 metric tons to unknown. The weekly export inspections were strong at 1.409 million metric tons. On the May chart, we slipped below the 200-day moving average at $3.79, with the 50-day at $3.72 3/4 the next level of support.
Soybean trade is 16 to 24 cents lower at midday with wetter weather in Argentina over the weekend and long profit taking noted for midday weakness. Meal is $10-$11 lower and bean oil is 15 points lower.
Outside markets have the dollar 20 lower, stocks lower and crude lower giving negative commodity influence. The weather pattern looks to return to some near-term dryness for much of South America with U.S. weather viewed as neutral to negative with rains in the western belt.
Crush margins continue to narrow with meal dipping lower, but they remain solidly positive. The weekly export inspections were disappointing at 490,536 metric tons. On the May contract, support is the 50-day at 10.18 with resistance at the 20-day at 10.51.
Wheat trade is 10 to 25 cents lower with Kansas City trade seeing the most pressure with rains moving across Oklahoma and Kansas last night and into the this morning. The coming week looks drier again, but growth should be boosted in the short term for many areas with good coverage across south-central Kansas and parts of Oklahoma. The extended forecast is better for the eastern areas with the west remaining on the dry side.
The dollar index remains just below 90 on the index, with sideways trade continuing. Black Sea origin prices have started to firm again, but the U.S. remains disadvantaged on the world market.
Weekly export inspections were on the upper end of expectations at 443,269 metric tons. On the May Kansas City wheat support is the 100-day at $4.65 after we fell through the 50-day at $4.85 overnight.