|
Soybean Strength, Wheat and Corn Weakness
by Tom Leffler,
Leffler Commodities
This morning the May
Durable Goods Orders, which measures demand for big-ticket items that
have a life of three years or longer, were a +3.6%. This is the second
straight month of upside. The April orders were revised higher from +3.3%
to +3.6%
The outside markets
performed much better today than the negative closes that occurred on
Monday.
Today's StatsCan Canadian
2013 acreage survey came in very near the trade's pre-report estimates.
All wheat was 26.178 million acres an increase over the 2012 acreage of
23.798 million. Canola acreage was pegged at 19.738 million acres, which
is below last year's 21.531 million acres. Corn acreage was put at 3.645
million acres and last year's acreage was 3.544 million acres.
Friday will be an important
trading session for the agriculture future markets due to the USDA
acreage report and quarterly stocks report, first notice day for the July
grain and soybean complexes July future contracts, the quarterly USDA
hogs & pigs report and the final trading session for the month of
June and second quarter of the year.
Based on a survey of over
20 analysts' by Reuters their average pre-report estimate for Corn
acreage is 95.313 million acres a decrease of 1.969 million from the USDA
March Intentions. Soybean acreage is 77.933 million acres an increase of
807,000 acres from the USDA March Intentions. All-Wheat acreage is 55.902
million acres a decrease of 538 million acres from the USDA March
Intentions.
Based on a survey of over
20 analysts' by Reuters their average pre-report estimate for Corn
quarterly stocks is 2.845 billion bushels a decrease of 303 million from
June 2012. Soybean quarterly stocks are 442 million bushels a decrease of
225 million from June 2012. Wheat quarterly stocks are 745 million
bushels an increase of 2 million from June 2012.
Corn
futures experienced early upside in what was appearing to be a
"Turnaround Tuesday" session, but that was short lived after
the 8:30 re-opening. Only the July contract was able to hold positive by
the close. New crop contracts found some pressure due to the slightly
improvement in the corn condition rating and some crop-friendly weather
forecasts.
For the second consecutive
week the U.S. corn crop showed slight improvement, this week the
good/excellent rating was up 1 point at 65%, the 10-year average is 68%.
The Iowa rating improved by 4 points to 54% good to excellent, the
10-year average is 74%.
The December corn futures
had an outside trading session today as it closed part of yesterday's
open gap and then closed negative, but above the 50-day moving average.
Sunday evening the contract left a 4 ½-cent open gap on the chart.
Resistance is $5.50 the 100-day moving average, the $5.60 area and $5.73
½ the June high. Support is $5.39 the trend line off the December and
April highs, $5.25 ¾ the June low and $5.12 the 2013 low.
Soybean
and soybean meal futures for the second straight session traded and
closed positive due to the strength of the July soybean and soybean meal
future contracts. Demand and continued concerns over tight supplies are
lifting the old crop contracts higher, at least till we see the USDA
stock numbers on Friday.
The good/excellent rating
of the U.S. soybean crop improved by 1 point to 65%. Iowa is at only 53%;
and Arkansas and Missouri are both at 55% good to excellent. Interesting
how Wisconsin saw their good to excellent improve from last week by 12
points and at the same time the poor to very poor increased by 6 points.
The U.S. soybean planting
progress is at 92% and the 5-year average is 95%. There is still around
6.2 million acres that are unplanted. Soybean emergence is at 81% the
5-year average is 89%. North Dakota is 76%; Iowa is 75% and Wisconsin is
69%.
November soybeans today
traded mixed, made a new high for the week and closed positive. The
contract declined 78-cents from the June 7 high to the June low (Monday).
Resistance is at $12.89 the 200-day moving average, then the $13.00 area
and the $13.33 June high. Support starts at $12.68 the 50% retracement of
the 2013 high to low, then $12.60 the 100-day moving average and then
12.51 the 50-day moving average.
Wheat
futures today closed negative on all three exchanges. The July Kansas
City contract had the largest downside as the winter wheat harvest
progress is pressuring the price.
We continue to receive many
reports from central Oklahoma through central Kansas that
wheat yields are much better than had been anticipated. The lack of
extreme heat late this spring and some timely moisture have helped to
allow the better yields. We also have been hearing of country elevators
filling up with wheat and being unable to move it out quick enough.
The weekly crop progress
report showed the winter wheat harvest in the U.S. is 20% complete the
5-year average is 37% and a year ago it was 63% done. Harvesting is most
active in Texas which is 55% done, 5-year average is 69% and a year ago
83%; Oklahoma that is 55% complete, 5-year average is 81% and year ago
was 98% and Kansas is 8% harvested, 5-year average is 39% and year ago
was 94%.
The U.S. Spring wheat is at
96% planted, with only North Dakota at 91% not done compared to the top
six producing states. Spring wheat emergence is now 90%, with North
Dakota lagging behind at 79%. The good to excellent rating is at 70% up 2
points from last week and below last year's 77%.
The KC September wheat
traded mixed today, made a new low for the week and closed negative. The
contract has closed below the 50-day moving average and 100-day moving
average for 29 straight sessions. Resistance is at $7.54 the 50-day
moving average and then at $7.66 the 100-day moving average. Support is
$7.10 ½ the June and 2013 low and then $6.93 the contract low.
Chicago September wheat
today had mixed trading, made a new low for the week and closed negative.
Sunday evening the contract left an open chart gap to the downside of
1-cent. Resistance starts at $7.08 the 50-day moving average and then
$7.19 the 100-day moving average. Support $6.81 ½ the May low and then at
$6.73 ¾ the contract low.
The Minneapolis September
wheat had and outside trading session to the downside with a new high and
low for the week and closed negative today. The contract has traded on
both sides of the 50-day moving average for the past 43 sessions and
currently has been below the 50-day moving average the past 11 sessions.
Resistance is at $8.01 the 50-day moving average and then $8.07 the
100-day moving average and $8.35 ¾ the May high. Support begins at $7.79
¼ the June low, then $7.63 the April low and $7.50 the contract low.
This
information is not to be construed as an offer to sell or a solicitation
or an offer to buy the commodities herein named. The factual information
of this report has been obtained from sources believed to be reliable,
but is not necessarily all-inclusive and is not guaranteed as to the
accuracy, and is not to be construed as representation. The risk of
trading futures and options can be substantial. Each investor must
consider whether this is a suitable investment. Past performance is not indicative
of future results. Mr. LEFFLER Does not currently maintain interest in
the commodities mentioned within this report.
|
