Soybeans surged higher in the overnight session, breaking through technical resistance on both the July and November contracts. July is now trading at contract highs and the next area of technical resistance is between 1280 and 1290 on the November contract. This morning’s export sales report could give more fuel to the old crop rally, with 73,600 tonnes of old crop soybeans reported sold last week. This was well above trade expectations for net cancellations of 50,000 – 100,000 tonnes. Today’s export sales report indicates that $15.00 soybean futures may not be rationing demand in the way many traders expected.
Corn futures are drifting higher at the moment, up 2 – 3 cents in Chicago. Old crop corn exports came in at 343,000 tonnes this morning, toward the low end of trade expectations. Once again China was a net canceller of U.S. corn on the week. Traders will be watching mainland China today as the government prepares to auction corn from state reserves. 1 million tonnes of corn will be offered in the sale and this will be an important indicator of mainland Chinese demand. Looking at old crop export data, China has not been a net purchaser of U.S. old crop corn since mid-March.
The wheat market continued to trade sideways in the overnight session on light news. Coming into the morning trade break Chicago wheat is up 3 cents while KC and MN wheat are unchanged. Export sales of wheat were in line with trade expectations. Rain is possible for the southern plains over the weekend although recent rain events have done little to improve crop conditions. With Texas harvest starting in early June, time is running out for this year’s hard red winter wheat crop.