Morning Highlights


Highlights

  • Wet weather continued over the Memorial Day weekend as heavy amounts hit Oklahoma, Kansas, eastern Nebraska, Iowa, northwestern Illinois, northern Missouri, southern Minnesota, and Wisconsin.
  • An article out of China stated changes to their economic structure, that the US wishes are made, are against their core interests raising fears a trade deal is still very far away.
  • Outside markets shows the DJIA futures at 25,637 up 17, Dollar Index at 97.650 up 0.173, and crude oil at $59.03 up 0.40.
  • Cattle on Feed report last Friday after the close showed on feed at 102.2% vs. trade guess of 102.9%, placements were 108.7% vs. trade guess of 113% and marketings were at 106.9% vs. trade guess of 106.6%.

 Corn

  • Corn gapped higher overnight, as forecasts continue to show rain for much of the Corn Belt through the first week of June on top of what has already been a record wet spring.
  • Crop progress report is expected to show corn planting at 60% complete vs. the 5-year average of 90%. Last week’s planting pace was at 49% complete.
  • The Commitment of Trader’s report last Friday showed many shorts were covered as the fund position is now net short of 117k contracts as of May 21st vs. 283K short the week prior.
  • December 2019 corn reach $4.295 overnight, matching the December 2018 contract high of $4.295 set on May 24th of last year.

 Outlook:  Higher on wet conditions.

 Oilseeds

  • Soybeans gapped higher on weather concerns as wet conditions continue to delay planting and forecasts are calling for more rain.
  • Soybean planting pace is expected to be around 30% complete in today’s crop progress report vs. the 5-year average of 62%. Last week’s planting pace was 19% complete.
  • November 2019 soybean contract reached $8.7225 overnight, matching the high set last week. Soybeans have been more subdued than other commodities as the trade deal wears on any sustainable rallies.
  • Chinese soybeans were 4 cents higher, settling at 3610 yuans per ton. Soymeal was 4.40 higher settling at 2841 and soyoil was 9 cents higher settling at 5386 yuan per ton.
  • Malaysian palm oil was 4 cents higher, settling at 4396.

 Outlook: Higher on wet conditions.

 Wheat

  • Wheat futures gapped higher overnight as heavy rains have hit Oklahoma and Kansas over the past week raising concerns on quality and protein content in the winter wheat. Also, strength in corn futures is providing support to the wheat market.
  • The Commitment of Trader’s report showed funds as of May 21st were net short 41.8k contracts in Chicago vs. 78.4k from the week prior. Funds were short 48.1k contracts in KC vs. 56.4k from the week prior. Fund positions are expected to be less short than the latest COT data after substantial gains have been made since the 21st.
  • The crop progress report after the close today is expected to show winter wheat conditions declining as the heavy rains have made an impact on quality.
  • South Korea bought 120,000 MT of feed wheat at $208/MT likely from the Black Sea.

 Outlook: Higher on wet conditions and spillover strength from corn.