Grains end mostly lower except nearby soybeans and bean oil.
Corn, beans and wheat saw strength on the open and took another run at resistance areas on the charts again and failed.
Is this a healthy correction or topping action?
Mike Minor, Professional Ag Marketing, says this may just be just a routine consolidation as the market waits for a bigger weather story to emerge.
The wheat markets have priced in some of the global production concerns in Russia and the Black Sea. European wheat markets also took a break on Thursday, so U.S. markets followed.
Corn is following wheat and was supported by the slow planting pace with excessive rain in key areas of the corn belt.
“However, the trade mentality is shifting from planting delays to the ideas that rain makes grain,” according to Minor. That was backed up by Thursday morning’s U.S. Drought Monitor which showed the drought area has shrunk to around 12% and the lowest in over a year.
Technically though he says the corn market does bear watching. “If you break below that $4.53 area on the July corn if we continue to get better weather outlooks going forward then we could start talking that this is like 2014. That year we met a peak in the corn market by the end of April or early parts of May in the lower $5 range.”
Soybeans are supported with the lower private soybean production estimates in Brazil including the most recent flooding in Southern Brazil. Soybeans did see bull spreading Thursday and support as well from the sharply higher bean oil market which followed a rally in Brazil bean oil. Minor says Brazil soybean basis levels are also roughly $2 higher than last year at this time and nearly in line with U.S. prices, which is also friendly.
The problem he says is weekly soybean exports were only 9.8 million bushels and are still running below a year ago by about 16%
Even in the event this is not topping action, he is recommending farmers reward this rally with both old crop and new crop sales.
