Funds Big Sellers In Corn
Jul 05, 2016
Good Morning! Paul Georgy with the early morning commentary for July 5, 2016.
Grain markets will open today at 8:30 CT and will likely be impacted by weather forecasts on the opening.
Rains fell over the southern portions of the Midwest over the weekend and the northern half of Midwest is expected to receive moisture later this week. However, some weather forecaster are using words such as “ridge building” after July 10th. This could create a resumption of buying in grains as details develop.
Crop conditions report this afternoon has traders expecting a further decline of 1 to 2% for corn and soybeans.
CFTC Commitments of Traders report showed that as of Tuesday, managed money funds were net sellers of 50,101 contracts of corn making them net long 174,726 contracts. They also were net sellers in soybeans of 5,519 contracts and 18,698 in wheat. Funds were net long 19,270 in soybeans and net short 81,986 contracts in wheat.
Funds were estimated to have been net sellers of 6,500 corn contracts, 9,500 soybeans, 7,500 wheat, 2,000 soymeal and 3,500 soyoil contracts on Friday.
Weekly Ag reports will be pushed back a day due to the Monday holiday.
Macro markets this week will focus on the continued fall-out from Brexit as the UK tries to move towards a negotiating position and in the meantime tries to contain the economic and financial damage. This Friday's U.S. payroll report will be watched to see if it can recover to the expected level of 175,000 and dampen concerns about a U.S. hiring slowdown. The Q2 earnings season unofficially starts this coming Monday with Alcoa's report.
August cattle futures closed lower on Friday but gained 2.10 last week. Key factors this week will be the retail fill in demand that could support cutout values. However, the “dog days of summer” are still ahead of us. Packers will be buying for a full production week which should provide underlining support to the cash trade.
Lean hog futures were down 1.05 for the week after testing horizontal chart support. Look for initial support at 82.65 in the august contract.
Dressed beef values were mixed with choice up .29 and select down 1.28. The CME Feeder Index is 143.81. Pork cutout values are up 1.03.
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