Corn: For most of the day on Monday, the corn market was quiet to slightly higher right up until the close. Looking back to last week, we see that funds exited 44,000 long corn contracts, which was likely end of month selling. Buying that was seen on the close certainly looks like smaller speculators buying before funds are expected to buy back in on Tuesday. Volume today was nearly half that seen on Friday which shows that this was smaller speculative buying. This buying will expect to find funds here Tuesday, so whether or not they are here will determine if these gains are held through the week.
Some traders are also looking ahead to the May 10 supply/demand report for a reduction in old crop stocks. Old crop bulls might want to tread cautiously before expecting a drop in those stocks. Last year, the April report left stocks alone, like this year and when May came around trade expected a delayed reduction. Instead, the May report last year showed a 55 million bushel increase.
While speculators have reason to buy, looking for fund reinvestment, they might want to be cautious staying bullish going into this supply/demand report. Starting Tuesday, we will see if funds come back buying again. After that, look for trade to start positioning where it wants to be going into the May 10 report…Ryan Ettner
Soybeans: The idea of “new month, new money” is all traders need to support these price levels in soybeans. New crop beans were the leader on Monday. Spreads were unwinding due to some surprise deliveries for beans on Friday. The November contract should continue higher to retest the 1400 level once again. It has been there several times in the past but has not managed to take it out.
Beans have a bullish new crop outlook and could get new buying interest ahead of the May USDA report. The May USDA report on May 10 will be the first look at new crop carryout and could show strong demand due to the record sales pace we currently are on.
Now that some producers are finishing up with corn they are starting to shift their focus to getting beans planted. Usually we are 6% planted as a nation, but as of Sunday night we were at 12% planted. This just means that we are ahead of pace. This does not mean that we are going to see big yield or that we usually beat trend line yields. Unlike corn, beans have no correlation between early planting and yield. We are still friendly new crop at these levels and should see a retest of the 1400 level…Steve Georgy
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