Soymeal Demand Lifts Beans
May 20, 2014
The grains traded higher in the overnight with July corn trading up 2 cents bouncing off its 100 day moving average, soybeans up 6 ¼ cents on strength out of soymeal and Chicago wheat rebounding 7 cents off of technical support.
July and new crop soybeans both traded higher in the overnight supported by the strength in soymeal which has maintained a strong up-trend since February, recently making fresh contract highs. Adding to the soymeal strength has been talk that crushing plants around the Midwest are running low on soybean stocks. In the last week the average U.S soybean basis has jumped 4 ¼ cents supported by strength at processing plants and along the river.
Yesterday’s crop progress report showed 73% of corn now planted, up 14% on the week and slightly below trade expectations. This puts planting pace now 3% behind the 5 year average for this week in May. Key states to watch moving forward are North Dakota, Minnesota, and Wisconsin where a cold rainy spring has put planting pace well behind schedule.
Soybean planting is now 33% complete, up just 13% on the week. Following last week’s rain, soybean planting progress is now 5% behind the 5 year average and giving some traders concerns about planting progress. North Dakota, Minnesota, and Wisconsin will also be important to watch in terms of soybean sowings. This week’s report showed just 16% of Minnesota, 5% of North Dakota, and 8% of Wisconsin soybean acres planted.
Looking ahead, rain is likely over the next several days across northern tier states but the 6-10 forecast looks favorable for planting. Friday and into the weekend we should see a warming trend develop that will extend from Montana into northern Illinois and help keep planters rolling as insurance deadlines approach.