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06-19-2017 06:53 AM - last edited on 06-19-2017 01:53 PM by marketeye
At the close:
At the close, the July corn futures settled 8 3/4¢ lower at $3.75 1/4 while December futures finished 8 3/4¢ lower at $3.93 1/4. July soybean futures ended 1 1/4¢ lower at $9.37 3/4, November soybean futures settled 1 1/2¢ lower at $9.48 1/2. July wheat futures finished 1 3/4¢ higher at $4.67. July soy meal futures closed $0.60 per short ton higher at $301.50. July soy oil futures closed $0.29 lower at 32.82¢ per pound. In the outside markets, the Brent crude oil market is $0.47 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 122 points higher.
Jack Scoville, The PRICE Futures Group’s Senior Market Analyst, says that market moment is more about technical factors than anything.
The crop reports should suggest the opposite of what is going on today, but the Commitments of Traders Report, from Friday, is showing that the funds covered almost all of the short position they held,” Scoville says.
So, it looks like they are selling again since the weather this week looks somewhat better, less heat a little more rain, Scoville says.
“On the other hand, wheat supported by heat in the Great Plains and bad conditions in Europe, and bean prices are looking for more spec short covering, but there is no real fundamental factor, that I know of, to drive it higher.”
At mid-session, the July corn futures are 6 1/4¢ lower at $3.77, while December futures are 6 1/4¢ lower at $3.95. July soybean futures are 31/2¢ higher at $9.42, November soybean futures are 3 1/4¢ higher at $9.53. July wheat futures are 6¢ higher at $4.71. July soy meal futures are $0.70 per short ton higher at $301.60. July soy oil futures are $0.16 higher at 33.27¢ per pound. In the outside markets, the Brent crude oil market is $0.21 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 114 points higher.
In early trading:
At 9am, the July corn futures are 6 3/4¢ lower at $3.77, while December futures are 7¢ lower at $3.95. July soybean futures are 2 1/4¢ higher at $9.41, November soybean futures are 2 1/2¢ higher at $9.52. July wheat futures are 2 1/4¢ higher at $4.67. July soy meal futures are $0.20 per short ton higher at $301.10. July soy oil futures are $0.19 higher at 33.30¢ per pound. In the outside markets, the Brent crude oil market is $0.17 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 84 points higher.
Soybeans were higher overnight amid concerns about the weather this week, though corn was down on some spreading action in Chicago, analysts said. It looks like mostly isolated to scattered showers this week with only Indiana forecast to get rain for sure. The good news is that it's still going to be hot, but not Amazon hot like it was last week. Soybeans were up about 4 cents while corn was down about 5 cents overnight. Wheat was little changed. Money managers are much more bullish on hard-red winter than they have been recently while being much less bearish on corn. See all the details in today's 3 Big Things at http://www.agriculture.com/news/crops/3-big-things-today-june-19.
Here's what happened overnight:
Brent Crude Oil = up 0.6%.
West Texas Intermediate Crude Oil = up 0.5%.
Dollar = down 0.1%
Wall Street = U.S. stock futures higher in pre-market trading.
World Markets = Global stocks higher on higher oil prices.
06-19-2017 08:11 AM - edited 06-19-2017 08:12 AM
From your post - this seems like a pretty substantial change. And yet, corn is down.
"Investors reduced their net-short positions, or bets on lower prices, to 4,015 contracts last week from 127,078 a week earlier, according to the CFTC."
You are saying the trade is nearly flat corn? And this is all months, or the nearby, or the dec or what?
06-19-2017 08:27 AM
Jim this is futures only across all contracts. Specs went from a big net-short position to nearly flat. That actually may be one reason that corn is down this morning -- because they shifted to ALMOST the net-long position but prices were still lower going into the end of last week. A lot of people believed dumping the short positions as funds did last week would mean higher prices, but it didn't translate that way so now analysts and investors are saying it's going to be hard to rally the market if it didn't rise as expected on the net-short dump. Does that make sense?
Basically, prices aren't rising as they were expected to do when the funds got rid of their short positions so now investors are wondering `What will it take to see higher corn prices?' The best bet, I'm told by country brokers, is for a weather rally to start building but with intermittent rains that come and go it's going to be hard for anybody in Chicago to get too excited to the bull side. Again, this is what I'm being told by analysts, brokers and weather forecasters.
06-19-2017 08:31 AM
corn exploded lower overnight and heavy volume has contin- ued throughout, but all that momentum has gone towards a recovery since that weak opening. Now that corn has cut out its overall fund short, the rest of the grains are left to deal with their own bearish speculative leanings as real weather/crop condition concerns remain. The trade will spend the day ponder- ing the upcoming crop progress numbers this afternoon—we’ll see if a third straight spring wheat ratings disaster can be avoided. Weather forecasts re- main split—beneficial in the center/east, dry in the Plains and western belt.
Jordan has tendered again for 100k tonnes of international hard milling wheat as well as 100k tonnes of feed barley; they have struggled to make purchases in recent tenders in the last few months due to uncertainty over quality con- trols and payment terms.
Private consultancy AgRural estimated Brazilian 2017 second-corn crop har- vesting at about 5% done as of Thursday, right around the average pace but below 8% at this point last year. They have the crop pegged at 67.1 MMT.
Friday afternoon’s Disaggregated CFTC Report showed managed money traders once again vastly underestimating net corn buying on the week ending last Tuesday (6-13), up 123k net contracts compared to a +44k net guess; that takes corn to just a –4k net overall, expected to be in the positive by the close of business Friday. Beans lost nearly 11k net there with meal –5.6k and oil – 17.1k, with Chicago wheat up a sharp 26.7k net on the week and KC up 20.6k net. Meanwhile, producers and merchants sold off nearly 104k net corn, and anywhere from –2 to –18k net across the rest of the grain complex to 6/13.
Export Inspections Estimates (000 tonnes): Estimate Range / Last Week Corn: 900-1200 / 1041.5 Beans: 300-500 / 508.2 Wheat: 500-800 / 774.0
Wheat-----That Jordan comment is interesting as in some locations in Ks there is some scrambling to find some protein....
I had a note from a marketer in Hays Kansas that protien as low as 12% is bringing a $1.00 premium.
Corn....... looks like a turnaround from the fund position change overnight should see some move back to positive today.
Important to note we are at or approaching the Dec Corn Seasonal high with the slide into harvest prices....at least in years where we anticipate record crops. and have a negative trend...
Will be interesting to see if the late crop delays the price peak or if there is enough uncertainty in the acres and crop to carry the small positive trend we have back into the $4.50 range as it did last year according to the chart on Stone's Morning Grain Comments.
06-19-2017 08:49 AM
From Summit Commodity Brokerage:
"The amazing thing about that is that while the funds bought this large number of short contracts back, the corn market lost 3 to 4 cents. So much for the argument that fund short covering would fuel a huge rally in the corn market!"
06-19-2017 09:38 AM
This sounds like the answer to my question that everyone ignored last week - if the specs were short the board but long calls, it's about a wash.
What is the spec position on calls? Are they as long calls now as they were? Did they buy back their shorts and sell their calls to offset, thus little change in market value?
In other words, the market was not depressed before by the spec shorts. At least the smart market wasn't.
Sounds like maybe it's time to decide if I need to sell corn because it may not get any better than this. Sell now or take a big chance and wait for two weeks and sell into the normal July sell-off.