COMMENTARY 5/22/15

Despite a shift in the storm-track, heat will trigger storms for the Southern Plains. The next 5-7 days look warm/wet for corn acres.

St Louis river level EASING at +21.8and forecast to be 17.4 by 5/27.

CORN          

DOWN 5    

Near-record crop ratings are expected on Tuesday.  The warm weather will be great for corn to begin taking in Nitrogen.  The Trade is looking for corn to be 93% planted versus 85% LW and 88% average.  The initial crop ratings could be 78-80% G/E?  US farmland prices fall for the 18th consecutive month according to the Creighton University Index, citing the strong dollar making US grain/oilseeds less competitive.

The Fund’s position is now RECORD SHORT at -132,960 contracts or 664 MILLION bu.  (Previous record they have ever been is -132,191 contracts.)  

Bloomberg Trader Bias:  Bullish: 26% TW (28% LW), Bearish 41% (34% LW); Neutral 32% (38% LW)

 

BEANS     

DOWN 14   

There is a growing S Am price advantage to US beans, a mixed sentiment on bird flu impact, and (like corn) the Trade is expecting very favorable crop ratings next Tues.   There was an Export Sale announced of 109.4 KMT of 15/16 SBM to Thailand.  The Argentina Ag Minister believes they have a 60 MMT crop, up 1 with harvest now 82% complete.  The BA Exchange rather,  maintains the crop at a 60 MMT estimate and beleives harvest is more like 88% harvested.  Strikingly, a recent Chinese crop tour is concluding that bean area may be down as much as 30-40%.

The Fund’s position is NEAR RECORD SHORT at -49,485 contracts or 247 MILLION bu.  (The previous record they have ever been is – 56,764 contracts.) 

Bloomberg Trader Bias:  Bullish: 6% TW (6% LW); Bearish: 62% (69%); Neutral: 22% (18%)

 

WHEAT          

DOWN 7

Quality concerns helped support prices early, but the sentiment turned negative with the “help” of a stronger dollar.   An Export Sale of 102 K MT of 15/16 wheat to Taiwan was announced today, consisting of  31.5 K HRW, 59.6 K HRS, and 10.85 K MT soft white.  Tues’ Crop Progress is expected to show Spring Wheat to be nearly all planted.  The Winter Wheat ratings seen steady to down 1.  French soft wheat ratings hold steady at 91% G/E, against 76% a year ago

Bloomberg Trader Bias: Bullish 50% TW (41%LW), Bearish 32% (31% LW), Neutral 18% (28% LW)

Locally, the SRW timing is getting critical and we NEED to see cool/rainy weather change to prevent disease issues.  So far,  disease pressure is still limited, BUT expect vomi issues if the 10 day forecast stays wet. There has already been some talk on the ‘Lower Miss river regarding vomi discounts with max 2ppm, trying to keep old crop vom out of pipeline.   ~STAY TUNED~

The Fund’s position is NEAR RECORD SHORT at -97,610 contracts or 488 MILLION bu.  (The previous record they have ever been is – 111,373 contracts.)  Funds are still carrying the vast majority of their giant SHORT and still beckons our attention.