World concerns sink corn, soybean prices
Due to world economic concerns in Greece and the Eurozone causing a liquidation of investments, combined with favorable U.S. planting and crop-growing weather, the CME Group corn, soybean and wheat markets are seen trading lower Monday.
The Early Calls for the commodities on Monday, May 14, 2012, are lower. Corn is seen opening 4-6 cents lower, wheat 3-5 cents lower and soybeans 20-25 cents lower.
In overnight trading, the July corn futures contract traded 2 3/4 cents lower at $5.78 1/4 per bushel. July soybean futures traded 28 1/4 cents lower at $13.77 3/4 per bushel, and July wheat traded 3 1/4 cents lower at $5.93 3/4. For July soybean meal futures, the contract traded $9.30 per short ton lower at $399.20. July soybean oil futures traded $1.01 lower at $51.23.
The outside markets are unfavorable for Monday's grain trade. The real factors driving the calls will be the sharply lower overnight soybean market and outside pressure .
Some analysts believe the washout of the global stock markets will need to end, before the ag commodities can recover.
Meanwhile, Tom White, FutureRoad.net analyst and CME Group floor trader, says the corn market could find higher ground later on Monday.
After buying in the early part of last week and a test of an upper channel line, the market sold off into Friday before finding a low near the bottom of the channel, he says.
"It broke a trend line in the middle part of the week which helped fuel a bearish pattern which received directional reinforcement from the crop report. There was a minor rebound in late Friday trade which might indicate that the market will have a secondary “leg” to the upside eventually on Monday," White says.
It's necessary to monitor, however, for the possibility of continued weakness in correlated markets, he says.
"On a “longer-term” basis, possibilities include the formation of a triangle before we make another move lower; or a return back up to the top of the channel," White says.