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A rainy outlook closed corn, soybean prices lower | Monday, May 24, 2021

Weather improvements for U.S., Brazil crops apply price pressure.

On Monday, the CME Group’s farm markets react negatively to the wet forecast for Brazil and U.S. crops.

At the close, the July corn futures settled 2¼¢ lower at $6.57½. New-crop September futures ended 4¾¢ lower at $5.68. December corn futures closed 6¼¢ lower at $5.40¼. 
 
July soybean futures closed 3½¢ lower at $15.22¼. August soybean futures closed 1¼¢ lower at $14.71. New-crop November soybean futures settled 1¾¢ higher at $13.62½.

July wheat futures closed 12¢ lower at $6.62¼. 

July soymeal futures closed $1.30 per short ton higher at $400.20.

July soy oil futures are 0.36¢ lower at 65.13¢ per pound.

In the outside markets, the NYMEX crude oil market is +2.42 higher (+3.81%) at $66.00. The U.S. dollar is lower, and the Dow Jones Industrials are 245 points higher (+0.72%) at 34,452 points.

Jason Roose, U.S. Commodities, says that pressure for prices is coming from different directions. 

“Grains are trading lower today with improving weather in the U.S., a potential increase in acres planted, and the U.S. corn and soybean planting pace well above average,” Roose says. 

Al Kulis, Kluis Advisors, says that investors are watching weather developments.   

“The weather outlook has improved in most areas for the U.S. crop and it looks like the dry areas of South America will get much-needed rain later this week,” Kluis stated in a note to customers. “I am watching corn and soybean basis levels. The crash in the soybean basis last week is a warning of what can happen in the corn basis if the processors get bought ahead through July. Cash basis levels and cash bids will move lower to match the new-crop bid. They will not push bids in this inverted market.” 

Kluis added, “The USDA Crop Progress report today may show U.S. corn planting at about 95% complete. I also expect corn emergence to come in well ahead of normal. I expect soybean planting to be at 75% to 80% complete.”

On Friday, the Commodities Futures Trading Commission Report (CFTC)  showed that corn speculative traders, in the week to May 18, cut the net long position by 25,511 contracts, or 8.0%, to a 21-week low net long of 291,025. Corn specs have cut the net long position for four weeks in a row. Corn specs were at a 10-year high of 401,993, five reports ago, according to Mizuho Securities USA’s daily note to customers.

For soybeans, specs in the week to May 18 cut their net long positions by 22,215 contracts, or 14.2%, to a five-week low net long of 152,584.

Wheat specs, in the week to May 18, increased the net long position by 1,007, or 7.7%, to a two-month high net long of 14,040 contracts.

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