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GRAIN MARKETS: Corn, soybeans lower even as rain threatens planting

Wheat markets mixed.

Corn futures were unable to hold early gains and closed lower even as forecasts have rain likely halting Midwest planting for a few days.

Soybeans were lower amid talk that delays in corn planting could possibly shift some of those acres to soybeans.  Winter wheat markets closed near unchanged while spring wheat had more gains as wintry weather slowed planting in the northern states.

Traders are exiting May contracts ahead of first notice day on Friday.

Wall Street’s gains were more modest than in the previous two days, with the Dow industrials  up about 40  points when the crops closed. Good quarterly earnings and Trump’s tax plan supported that market. Crude oil stayed lower even as a government report showed larger-than-expected drop in weekly stocks.

Exports – USDA, Reuters:

  • Tunisia bought about 75,000 metric tons of optional-origin milling wheat. Shipment for June 25 to August 5.
  • A Taiwan group bought 65,000 metric tons of corn that is likely to be sourced from Brazil. Shipment is for July.
  • Israel seeks to buy up to 100,000 metric tons of corn, 45,000 of feed wheat and 30,000 of feed barley from optional origins. Shipment would be this summer with dates determined by origin of the grain.
  • Iraq seeks to buy 50,000 metric tons of wheat from the U.S., Canada or Australia. The tender closes May 7.

Corn futures closed about 6 cents lower to take back most of yesterday’s gains and to finish under key moving averages.

Traders may have been rattled by talk in Washington about exiting NAFTA, which could have Mexico looking elsewhere for corn.

Weather forecasts remain bullish with rain for most of this week and the 6- to 10-day outlook also wet.  Severe storms and flash flooding are expected today and on Friday in the western Midwest and Delta.

The seven-day and 6- to 10-day forecasts keep rain in the Midwest along with cooler weather.

The CBOT’s estimated volume for Wednesday was not available. Tuesday’s volume was 641,481. Open interest in Tuesday’s higher market decreased by 23,892 with May’s down 35,584 and July’s up 9,614.

May corn closed down 6 at $3.65, July down 5 at $3.66-3/4. New-crop December was down 4-3/4 at $3.84-/4.

What to Look For: Estimates for Thursday’s weekly export sales were on both sides of last week’s business. Attention remains on the weather and how much planting can be done. May 15 looms large in many farmers’ minds as planting after that can affect yields, particularly in the northern areas of the western corn belt.

Soybeans dropped more than 8 cents with May under key moving averages. Soybean meal was also down, dropping about $4 a ton in nearby months

Planting delays have been a concern for Canada’s canola and continue to push that market higher. Old-crop canola months were lower today after recent gains, but the new-crop months were higher again..

The CBOT estimated volume for Wednesday was not available. Tuesday’s volume was 231,391. Tuesday’s open interest decreased by 16,441 in the lower market with May’s down 23,738 and July’s up 5,690. November’s open interest increased by 306.

May soybeans closed down 8-3/4 at $9.45-3/4 per bushel and July down 8-1/2 at $9.56-1/2. New-crop November dropped 7-3/4 to $9.54.

What to Look For – Weekly export sales on Thursday are expected to be up from last week’s dismal numbers. Financial and equity markets have been garnering headlines and attention. The May 7 French vote looms large and, depending on the results, could send tremors through a number of markets including commodities.

Winter wheat markets were largely flat, while spring wheat had more gains due to the planting delays up north.

This week’s rain may providing some support to wheat as severe storms and flooding could wash out some Midwest SRW fields. The seven-day forecast has a total of about 12 inches of rain in parts of northwest Arkansas and several inches from the Delta to the Great Lakes. Flash flood warnings were posted for much of the Delta.

Spring wheat had solid gains amid concerns of late planting along the northern border. South Dakota is the only spring wheat state with significant progress. North Dakota, the top producer, is at 2% planted versus the 4% average as winter has been slow to depart that state.

CBOT estimated volumes for Wednesday were not available. Tuesday’s volume was 208,964. Tuesday’s open interest decreased by 17,053 in the higher market with May’s down 17,394 and July’s down 1,983.

Chicago’s May soft red winter wheat closed down 1 at $4.07-3/4 and July down ½ at $4.26-1/2. Kansas City’s May hard red winter wheat was up ¼ at $4.12-1/4 and July rose ½ to $4.25-1/4. Spring wheat for May rose 4 to $5.37-3/4 and July was  up 6-1/4 at $5.50-3/4.

What to Look For – Estimates for Thursday’s weekly export sales ranged both sides of last week’s business.  Winter wheat is doing fairly well because of the recent rain. Spring wheat is being watched as winter-like conditions have slowed planting.

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