A strong close to a very strong week for corn and wheat today.  Both commodities made new high's for the week as corn finished up 9 cents and wheat up 37.  Concerns are growing about the size of the HRW crop as dry conditions in the next 2 weeks will hurt kernel fill.  Traders are also closing watching dry conditions in Russia and fear conditions will deteriorate further next week.  The wheat market is quickly pricing itself out of feed rations and that has spilled over strength to an already tight old crop corn S&D.  Forecasts call for mid to upper 90's across a good portion of the corn belt next week and those without good sub soil moisture will be closely watching over the weekend for better rain chances. 

Soybeans were down sharply today with old crop July off 33 cents and new crop down 18.  Many traders believe today's price action in soybeans is tied to spreading of corn/bean and wheat/bean contracts.

On next Monday, the CME Group will start it's 21 hour trading day as the markets will start at 5:00 Sunday evening and they won't stop trading until 2:00 Monday afternoon. 

Scott Meyer 

July Corn up 2.0 @ 5.83

July Beans dn 19 @ 13.87

DOW DN 125 @ 12,695

Outside market weakness was again the biggest factor as the soybean complex sold off while the grains finished nearly unchanged. The weakness started overnight and actually subsided a bit during the day session but again it was a “risk off” day in the grains as a whole. There were some looking for strength overnight due to the Chinese cutting their reserve requirements on banks by 50 basis points, but as often is the case this was seen as being less than expectations so it didn't lend much help. The bigger issue was the losses that the ruling party in Germany suffered in elections this weekend and that throws the entire austerity package in the EU up for grabs. The news sent the Euro lower versus the US the dollar which helped to pressure commodities as a whole with crude old down $2.00 a barrel and gold down $27.50 and approaching values not seen since Christmas. For the overnight traders will be watching to see if Greece makes an important bond payment to see where the broader market goes.

The corn market was quiet today and ended pretty quietly. You know the volume is light in the when the July soybeans have 50% more volume on the day than July corn. There is support for corn with cash markets still registering strong historical basis despite the weakness of the last week. Weather at this point seems neutral at  best with bulls saying that forecasts are on the dry/warm side but at this point the crop doesn't need a lot of additional moisture. Corn planting tonight was announced at 87% up 16 for the week and 20% above average. The current forecast appears conducive to getting that pretty much wrapped up by next week.

The soybean complex again saw liquidation type selling today in some follow through from the weakness that we saw to end last week. The soybean market did trade to new lows in the overnight but did rebound somewhat to close $.19 lower. Soybean plantings at 46% complete were up 22% for the week and compares to the 5 year average of 24%. Much like in corn would largely expect to see a good deal of the bean crop planted by next Monday report obviously.  Old crop beans are now $1.25 off there highs set just are expecting to see the market stabilize as China seems to still be interested in old and new crop beans. While demand should pick up there are still a large amount of commodity fund long positions in beans so we'll see if they are content to hold for now or keep liquidating. 

July Corn dn 6.5

Dec Corn dn 2

July beans dn 49

Nov beans dn 37

Lots of talk today of a large European hedge fund selling out of grain markets today started prices lower.  To back up that outside weakness, the weather forecast looks ideal with nice dry conditions throughout most of next week to allow producers to finish up planting in a timely manor.  JPMorgan bank reported a $2 billion trading loss in the last quarter due to 1 very bad employee, ouch.  Heading into a great weather weekend, it just appeared everyone wanted to limit their exposure to grains today.  China will be closely watched as prices dip lower, as the USDA did announce 300,000 tons of corn sales to unknow destinations this morning.  We need to continue to have these announcements to dwindle our old crop S&D and help trim some of the 1.8 billion bu carryout projected next year.  For those producers who still have old crop corn and soybeans, I think trade like today is going to happen many more times until we get to September up here in Northern Illinois. 

Scott Meyer   

Good evening,

The corn market struggled all day before collapsing to close $.15 lower ahead of the May Supply and Demand report to be released at 7:30 Thursday morning. The feeling of the day was that USDA will project 2012-13 stocks as high as 1.9 billion bushels, up substantially from the 750 million expected for this year. The current expectation is also for USDA to be conservative on Chinese new crop corn import ideas so with a good start to the 2012 crop and no outlandish demand surprises today quickly became a day where funds took off positions ahead of the higher 2013 carryout estimates. The fact that we are even worried about the 2013 USDA carryout estimate is somewhat humorous as we don't even have it all planted yet nor do we know if China is going to need 5 million metric ton or 20 million... There is real discussion centered however on recent rains in Brazil and how they have improved crop prospects for their second corn crop which will be available in August to compete with old crop U.S. supplies along with what is expected to be a good wheat crop and an earlier than usual start to the U.S. harvest with early planting abundant in the central and southern areas of the Corn Belt. Locally our concerns range from when can we get back in the field to finish corn and soybean planting in our northern areas to waiting to see standing water recede from planted corn and soybeans in our southern area so damage assessments can be made.

Soybeans were lower today as funds continue to take profits on long held long positions, I am told that today was the first day that nearby beans traded below the 40 day moving average since the middle of January. The Supply and Demand will obviously have a huge impact on soybeans tomorrow as well with USDA expected to further reduce South American soybean production with a resulting increase in U.S. exports to bring a downward adjustment in 2012 ending stocks to somewhere near 220 million bushels. The average trade guess for Brazil soybeans is 65.5 (66.0 in April) million ton with Argentina at 42.0 (45.0 April).

Thanks, Phil

China has been buying up US beans last month—77mbu. This is 18mbu more than average and 3X the amount from last year.  A lot of bulls are focused on US bean exports and dwindling South American supply. South American estimates continue to fall. Analysts almost seem to ‘one up’ each other with who has the lowest estimate. Current levels are 6MMT lower than USDA estimate.

Nathaniel Dubravec