Gimme grains

End of the day market wrap-up

Corn (CBOT:CN14)

Fundamental Support: On the first day of the month, the 450 support area was put to the test, it worked much as expected. It is important to know that the buy back from that area was a long period of small buying compared to the active and aggressive morning selling. On the first test the support area held, however and now we will see if it can hold on a couple more tests to prove the slide has slowed. Now that December has fallen to the area of support it should be mentioned that the next key support is 446. Weather forecasts came back from the weekend still looking very solid. NOAA released an update of their June outlook suggesting a month that will be slightly cool and above average rainfall. We will see just how strong the 450 support is when it is put to the test again.
 

Old crop traders:

• Last week’s pickup in old crop sales suggest demand is coming back in July on a pullback

• Larger fund rolling should be expected this week as July moves over to December has front month

• July/Dec corn spread moved just short of contract highs at 12 3/4

New crop traders:

• Maps still show plenty of rain in all 15 days of the forecast

• December has hit important chart support which held the first test

• Longer term support in this area is still unknown until it is tested again

• Trade was expecting a 70% GTE rating this afternoon

Bulls:

• December should be considered a buy on any other tests at or close to 450

• Bulls will want to pay close attention to the GTE rating now, any moves lower is a buy

Bears:

• Short term Dec selling can be considered right around 460 looking for quick profits

• As long as weather maps continue to look good, continue selling bounces for short term trades


Soybeans (CBOT:ZSN14)

Fundamental Support: We began the month of June trading on a choppy note with bull spreading of the old crop/new crop spread dominating the day’s action. The July/Nov spread put in a 20 ½ cent range for the session. Continued strengthening of the old crop was due to strong cash basis we are seeing for old crop beans. The new crop contract continues to come under pressure due to the rapid planting pace of the beans and the bearish spin the trade is giving the forecast. The latest forecast calls for regular rounds of showers and thunderstorms to occur through the next week and the resulting rain will ensure all areas have favorable soil moisture through the next two weeks.

As for planting progress the trade was looking for the 75% of the crop to have been planted as of Sunday. The average planting pace for this date is 71%. The range of trade’s estimates for the planting pace was a wide 71% to 83% range. The actual number released after the close came in at 78% and will be view bearish by the trade.

The weekly export inspections came in a friendly 156,364 tonnes. This was above the 4.2 million bushels needed to ship out to meet the USDA current export target of 1.6 BB. The weekly CFTC report showed the funds added back some light to their long buying 6118 contracts last week. With the trade looking for the old crop ending stocks to continue to shrink due to continued strong demand, we would look for old crop contracts to continue to find support on breaks. As long as the weather continues to hold out we would look for new crop stocks to work there lower and look for fall low to hit the $9.75 level.

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