Chicago Agriculture Commodities Finished Mixed on the Week

Chicago Agriculture Commodities Finished Mixed on the Week

$CORN, $WEAT, $SOYB

Chicago Board of Trade (CBOT) agriculture commodities finished mixed on the week, with Wheat and Soybean futures dropping more than 2%, as the US Department of Agriculture (USDA) raised domestic Wheat and Soybean stockpiles in its latest monthly crop report.

The most active Corn contract for May delivery rose 5.25c weekly, or 1.36%, to 3.905 bu,

May Wheat delivery went down 10.75c, or 2.15%, to 4.8925 bu,

May Soybean dropped 31.75c, or 2.96%, to 10.3925 bu on the week.

Corn futures extended their advance with new rally highs. Corn’s story through the middle part of Summer is mildly Bullish as the US old crop balance sheet tightens and implied new crop stocks rest at a multi-year low.

The USDA still has work to do in terms of cutting South American production, and so looks to add more bu’s of Corn to US export demand.

Old crop stocks are likely very close to 2-B bus, which assuming lower seeding and trend yield suggest old crop stocks will exist in a range of 1.7 to 1.8-B bu.

Wheat futures were unable to exceed the prior week highs, and on a modestly Bearish USDA report, ended the week down over 10c.

As expected, the USDA in its monthly report lowered US exports and indeed the market is currently priced well above the rest of the world, limiting export interest from now till June.

Wheat stocks were raised another 15-M to 510-M bu, and since the November report have been raised 40-M bu.

Soybean market ended the week lower for the 1st time since mid January. The USDA report offered something for both the Bulls and Bears, by lowering their estimate for old crop Soybean exports and raising old crop stocks, while they also made deep cuts to the Argentine Soybean crop and raised US old crop Soymeal exports.

The initial price response was mixed, while markets fell sharply through Friday’s trade as the 6-10 day weather model forecast showed good rains falling across the Argentine Soybean belt in late March.

With crop maturity already advanced, it’s not likely that this rain event adds to yield, rather it just stabilizes the crop.

But, more importantly to the CBOT trade is that the Commitments of Traders report showed funds holding a record large Soybean meal position, and the largest Soybean position since July 2016.

Agriculture analysts expect spot Soybean to find support on a break back to 10 bu, but they doubt that a lasting Bear market develops amid new crop yield and seeding uncertainty.

Have a terrific week

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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