Thursday saw a mixed session with beans and wheat showing good strength on spread reversals against corn with the latter struggling on either side of unchanged until the final couple brackets. Corn rallied into the close due to concerns over wet weather dominating the central part of the US for the next 10 days. Thursday’s midday weather maps confirmed these fears which allowed for bulls to win the day all over the floor. Beans were the strength on small buying and spread reversals but the rally does not feel like it has legs. The weak sales and slow planting are bearish impacts. When farmers cannot get corn in in a timely manner they switch to the shorter season beans. Meal exploded against oil on oilshare reversals with bull spreads winning on profit taking as well. This like the bean rally does not feel long lived. Wheat acted well but closed off highs on profit taking by weak longs heading into the three day weekend. KC and Minni lost slightly to CHI wheat on the close after showing good strength early. This again is attributed to profit taking in both high protein markets. In my opinion nothing on the fundamental side changed to bearish for either crop so continue to look for strength here. KWN-CN reached $2.00 briefly before closing just under. I think this was a good level for entrenched bulls to exit longs in KC and saw just that heading into the later stages of the session. I believe there remains great potential but the market has very light volume making moves extreme. Option expiration brought no fireworks to the trade with limited volume at pegged strikes. A subtle bearish bias with options exercising and abandonments in beans with 1317 1380 SK calls abandoned and 628 puts exercised. In hindsight I feel this was not a good move.
The overnight session started strong and continued strong through the close with wheat the price leader. This is due to excessive weather problems in the southern plains and continued flooding in spring wheat areas. KC and Minni dominated price action on speculative buying against corn. KWN-CN exploded by 15-cents overnight with KWN-WN gaining 10-cents. Corn rallied but lagged behind closing in the middle of the range well off nightly highs. Beans lagged but were higher with oil regaining a bit of Friday’s losses versus meal. Oats were higher again on planting concerns with weather outlooks more bullish this morning. The macros side was supportive adding to the growing momentum.
Heading into the day session traders saw Iraq buy 300 TMT US and Aussie wheat with further details expected during the day session. Markets are also waiting to see the results of the Saudi deal. Outside of this I see bullish weather forecasts, a weak USD and crude holding green. I think the overnight momentum points to double digit gains in corn and wheat with nothing looking to change the pattern markets are in. Technicals remain mixed with beans holding the best overall stance. I feel the picture to start this week and the end of April is positive for bulls with weather, demand and fear creeping back into the marketplace.
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