Old crop soybeans finished the day strong ahead of the long weekend. May corn settled 1 ½ cents higher at $6.58 ¼, May soybeans 14 ½ cents higher at $14.34, and May wheat ¾ of a cent lower at $6.38 ½.
May soybeans finished at a new settlement high for the move. Beans may be trying to take out their high of $14.56 which was made last September. The USDA Ag Attaché in Brazil lowered their production estimate by 2.5 million MTs down to 66.0 MMTs. November soybeans finished higher but weren’t able to find the same strength old crop soybeans had with such heavy bulls-spreading going on. Wheat continues to find weakness and is now trading at a 19.75 cent discount to corn again! This seems to have kept old crop corn resisted over the past few days. If we continue to see wheat trade at such steep discounts to corn we could see a lot more wheat feeding between now and the end of the summer.
The market is likely gearing up for the USDA report on Tuesday morning. The important things to watch out for are old crop ending stock changes as well as South American corn and soybean production cuts. The market is expecting the 2011/2012 soybean carryout to drop to 246 million bushels which is down almost 30 million from the March USDA estimate. The average corn carryout is estimated at 721 million bu which is down from the last estimate of 801 million bushels. These lower estimates continue to put a bullish tilt to the market. Export sales were also favorable this morning adding to the strength. Export sales ended up as follows.
Estimated Range Old Crop New Crop
Corn 400,000 – 700,000 MTs 937,600 MTs 185,100 MTs
Soybeans 600,000 – 850,000 MTs 406,900 MTs 706,000 MTs
Wheat 300,000 – 500,000 MTs 408,300 MTs 103,400 MTs
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