The Grain Report - HOLIDAY CHANGE

HOLIDAY CHANGE............ When we return from the holiday, as markets are closed Monday, we will see something we haven't seen in a long time. Hot and dry weather. WX RIS the weather site sees next week through June 7 and possibly June 10 as hot and dry across the entire Midwest grain belt essentially opening the planting window allowing farmers to finish up with acres of grain they intend to plant. The Eastern grain belt of Illinois, Indiana and Ohio should benefit the most as Indiana and Ohio are furthest behind on corn planting. The Western grain belt states Iowa and Nebraska are largely done. Only wildcard is North Dakota, they look to continue wet and cool suggesting some spring wheat, oats and corn will go on planted and switched to beans. The question to traders on this weather change is will the market price it in when the week begins with lower prices. The last seven weeks, we began with higher prices as funds priced in measurably wet weather slowing planting. Will they again start this week pricing in the weather but for the first time it would mean opening lower. Considering how bullish all fundamentals are it seems risky. Winter wheat crops are in trouble from the US, Canada and across Europe, while late planting dates for corn and acres flooded away in the South have traders already cutting 2 to 4 m.a. of corn production. Here's some thoughts for the aggressive and conservative traders. Aggressive traders can sell short, preferably corn and other grains Friday and look for a drop in prices when we returned Tuesday as funds sell to price in the better planting weather ahead removing some of the weather premium built-in prior. Conservative traders wait for Tuesday to see if the break occurs. If a measurable correction lands all should look for any early week low to buying long again as funds and large traders won't want to be short futures ahead of the next USDA monthly crop report. Everyone will want to buy long into it on fear the government will come in with production, yield and ending stocks numbers that reflect the potential of acres lost with production due to one of our most dismal planting seasons on record from a weather viewpoint. It's more of a buying on fear of what the report could say and not fact. The government might be conservative on the June 9 crop report, saving its final thoughts on production from acres planted for the June 30 final planted acreage report. The wildcard next week is if funds decide not to trade weathers effect on planting. They could come in as buyers saying it doesn't matter that we can plant now see an end to planting, but what matters is we've lost wheat production and corn and spring wheat acres. In this case, they simply rally. Let's cover some of the week's news events. China bought some corn, 116 t.m.t. hardly enough to mention if it were not from the worlds largest appetite. The trade knows China will be a big buyer of corn this year as they continue to expand hog, chicken and ethanol production after draining their meager corn reserves by making it available to their users to help curb inflation. But China's aware of there buying presence pushing world prices higher so they may do in corn what they have done in soybeans and that being buying for new crop shipment after September one when new crop harvest supplies buffer their impact. The other news was talk of Russia lifting their export ban on grains. Last year drought force them to suspend exports to keep what little grain they harvested for themselves. That export ban pushed wheat 1.80 higher last August. Here's the reality. Lifting the ban only means if they produce enough wheat and other grains to meet domestic needs, they can then enter as an exporter but doesn't guarantee it. Currently, they like others in that part of the world remain very dry in spring planted grain fields. Here's the technicals. July corn support is 7.22 then 7.02. Resistance 7.56 then 7.74 and 7.88. December support is 6.72 then 6.40. Resistance is 6.84. Then 7.14. July beans support is 13.75 then 13.35. Resistance 14.10 then 14.40. November beans support lies at 13.60 then 13.30. Resistance is 13.90 then 14.10. July wheat support is 8.00 then 7.80. Resistance is 8.30 then 8.65. Beans support and resistance prices are as on the opening on Friday.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics


Latest Markets Videos