Grains: Remain calm and trade on

End-of-day grains wrap-up.

Corn  (CBOT:CNN14)

Overnight traders followed the strong close on Friday that was seen due to option expiration. Day session traders, however, quickly resumed light selling at 8:30 followed by moderate fund selling which really kicked in at 9:30. Fund selling dominated the market through the rest of the day. Forecast updates at noon added a little rain for areas that didn’t necessarily want to see it at the same time trade spent the day looking for a 2% decline in condition ratings. Last week’s condition ratings were 76% GTE and the average for this week is 67%. This market still can stand some decline to conditions and still remain an overall strong rating with lofty yield projections. Trade should remain calm most of the week ahead of next Monday’s acreage/grain stocks report.
 

Old crop traders:

  • Old crop traders are looking forward to Wednesday’s ethanol report which showed record production last week
  • July/Dec spread selling could see support anticipating a bullish stocks portion of Monday’s report
     

New crop traders:

  • Heavy rains did fall as forecast for western IA with 2 – 4″ totals
  • Funds held a 150,000+ long position coming into today which suggests more liquidation could be seen
  • 1 – 5 day forecast maps show more moderate rains for southern MN and eastern SD
  • Corn GTE ratings came in down 2% at 74% as trade expected
     

Bulls:

  • The end of last week gave some confidence but pre-report buying is still likely to offer best support

Bears:

  • As long as funds are still selling, bears will have that as a backup to any short positions in place
  • Large support is still expected close to contract lows which offers an obvious profit taking area ahead of Monday’s report
  • Once the smoke cleared today it showed that selling Friday bounces still has worked well in this market

 

Wheat  (CBOT:WN14)

Wheat finished the day lower as we watched selling continue in the grains. Corn kept pressure on feed grains today with wheat following most of the session.

Recent weather has been better for harvest in the southern plains but is starting to cause some quality issues in soft wheat growing areas. Major spring wheat growing areas are seeing large rainfall totals which are going to cause some concern over flooding acres.

Spring wheat ratings dropped 1% today, as expected, due to too much moisture.

A week from today the USDA is going to release quarterly grain stocks as well as planted acres numbers for spring wheat. Usually these stocks report will give us some fireworks but with usage and exports on pace for old crop wheat we would expect trades estimates to be fairly close to the reported number.

Export inspections were friendly and should help us stay on pace for the USDA’s export projections.

  • Export estimates were 300-450,000 tonnes with the reported number at 581,453 tonnes
  • Pakistan tenders to purchase 55,000 tonnes of Black Sea wheat

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