AgResource Daily Farm Marketing Advice for Monday: 1/ Corn Producers: Forward sell/hedge an estimated 30% of your estimated 2018 corn crop if Dec’18 corn futures reach $4.14.
6:30 AM CST CBOT Prices: July soybeans are up 8.25 cents at $9.645, July corn is up 5.0 cents at $3.715 while July Chi wheat is up 9.0 cents at $4.415.
Good Morning! Ag markets are up (relatively) sharply as traders react to weekend weather and larger than expected fund short positions at the CME. (The US government has, of course, averted a shut down, and a funding agreement has been reached to keep the lights on through at least September.) Managed funds as of last Tuesday were short a record amount of wheat, a near record amount of corn, and were net short meal for the first time in 12 months. Amid moderate North American weather threats, and ahead of the entirety of a growing season, periodic short covering rallies will remain a feature through spring.
3-day rainfall accumulation as of this AM ranges from 1.5-5.0”, with heavier amounts recorded in parts of MO, S IL and far S IN. Low temps this AM range in the upper 30s and 40s, and overall weekend weather was generally in line with expectations. Perhaps the coverage of excessive rain was smaller than anticipated, but no doubt field work will be delayed until the later part of this week, and looks to be put off till next week across Southern Midwest amid additional rainfall expected there in the coming days.
The EU & GFS models are in agreement that follow up showers will sweep across OK, MO, AR and W IL Thurs-Fri. Drier weather develops elsewhere, and additional heavy rain is absent through May 17th.
A moderation in Central US temp is also due in the next 2-3 days, and more seasonal readings will be established across the W Plains, and will work slowly eastward into mid-month. Highs by mid/late week will reach the 70s out west, and rise into mid/upper 60s across the Eastern Corn Belt. US weather input is mixed: soaking rain was largely expected, but is still a negative, while the pattern ahead will be much more conducive to planting.
Deliveries against May futures included 936 contracts of corn, 104 contracts of meal and 936 contracts of beans.
The US dollar this morning is up slightly, spot crude oil is down $.25/barrel, Malaysian palm oil futures rallied a modest 12 ringgits overnight, and European grain markets are closed due to today’s May Day holiday.
The Wheat Quality Council’s tour of Kansas will be ongoing this week, and of particular interest will be tour’s analysis of elevated disease pressure this year and of recent frost/freeze damage. The tour compiles an average of participants’ production estimates on Thursday, and ARC highlighted last week, the tour’s guess is historically pretty accurate relative to NASS’s first estimate in its May WASDE – which is due in just 7 trading sessions.
Short covering is the theme today, and whether follow through buying occurs through the balance of the week will be key. Expect a modest boost in volatility, and we remain patient in extending old and new crop cash sales. Brazilian trade will be updated today; US trade updates are out on Thursday.
