Market Closes - May 22, 2013

Posted on May 22, 2013
In a surprising move, July Corn futures soared today, supported by a large new-crop export sale, an increase in the weekly ethanol production and ideas corn planting will slow down again this week (especially in northern Corn Belt).  Even with today’s 18.5-cent gain, the July contract still sits below Monday’s high and last week’s high. Additional chart resistance comes in at $6.69 and $6.76 (top of USDA Report gap).

 Soybean futures lagged the corn rally early in the day, but rose sharply in the last 30 minutes and closed near the day’s highs. Today, the July closed the price gap left on the daily continuation chart when the May 2013 contract expired.

 Spec funds were big buyers of corn and soybean futures. Outside markets were bearish (stronger US dollar, weaker energy).

 Looking at just one example in Henderson, one can see CASH corn and soybean basis levels have been moving in opposite directions this week.

CASH BASIS: Henderson, KY Date     Corn  Soybean                Basis July Futures May 1     +45     +100 May 8     +54     +105 May 15   +55     +107 May 22   +63     + 90

Wheat futures reluctantly followed corn higher, but not to the same magnitude.

 Live Cattle futures traded a little higher overnight on Tuesday’s boxed beef strength, but began to sell off as soon as the pit-trade opened at 9 am.  Cattle reportedly traded in Texas at $124, down a dollar from last week.  CHOICE Beef rose to a new high again today, but SELECT Beef lost ground with the Choice-Select Spread now at $19.01/cwt. Choice up 0.54 at 211.20; Select down 0.78 at 192.19.

Ignoring the sell-off in the Cattle pit, Lean Hog futures traded sharply higher on technical buying.  Traders just seem to be very optimistic about a seasonal gain in hog prices. Pork Cutout up .65 to $94.34/cwt.   Tonight’s Cold Storage Report shows pork stocks at a record-high 699 million pounds. So LH futures could be under pressure as they begin trading later this evening.

 Investors and traders alike were listening to Fed Chairman Bernanke this morning.  He was not definitive on future Fed action in its quantitative easing program.  However, the market focused on his comments that the Fed could taper bond buying if jobs improved.  Also the Fed Minutes from its May 1 meeting showed several FOMC members are willing to reduce the QE program if economic data improves by the time of the next meeting in June. Today’s early rally in stocks gave way to sharp losses and thus the equity index charts look negative.

Treasury yields also reversed early weakness to close higher.

Corn Jly +18.5 658.5; Sep +13 560; Dec +10 530.5 (519-531) Bean Jly +16 1494; Sep +12 1300; Nov +18 1239 (1221-1240)    Meal Jly +2 441; Dec +7 350     Oil +16 4964 Wheat Jly +8 688.5 (680-693); Dec +7 710.5   KC +5 743; MGE -6 808 Oats +11.5 366 Rice +16 1534

LC Jun -110 12000; Oct -95 12252; Dec -87 12432 FC May -27 13162; Aug -215 14432; Oct -210 14862 LH Jun +215 9455; Aug +147 9207; Oct +97 8252 Milk May unch 1851; Jun +4 1810

US$ +.5% Dow -80 15307 SP -14 1655 NAS -39 3463 Tran -103 6416    VIX +.45 13.81

WTI -153 9465 Brent -157 10234 Gas -3 282 NG -1 418 HO -5.5 287 Eth +1 265

Gold +9 1387 Slvr +2 2247

2-yr +.01 0.25% 5-yr +.07 0.89% 10yr +.10 2.03% 30yr +.08 3.21%

KENTUCKY CASH GRAIN BIDS Click Here

Tagged Post Topics Include: Economics, Market updates