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NEAR-TERM MARKET FUNDAMENTALS: The market starts the week with a somewhat negative tone according to traders. They say that this stems from weak outside markets this morning as well as dry conditions in much of the northern Corn Belt over the weekend. Somewhat favorable planting weather was also seen in parts of the central Corn Belt over the past 2-3 days. Today and tomorrow should also see mostly sunny and dry weather across the Midwest, although forecasts call for more rain to move into the region on Wednesday and many areas east of the Mississippi are still too wet to plant. Traders are also expected to do some evening up ahead of tomorrow’s USDA Supply/Demand Report after last week’s strong buying by trend-following funds. Traders look for a 15-20 million bushel decline in ending stocks from last months 1.7 billion bushel forecast for the 08/09 season due to better than expected exports. For new crop, traders see ending stocks near 1.3 billion bushels with estimates in a wide range from under 1 billion to near 1.5 billion.
The Commitments of Traders Report for the week ending May 5th showed good net buying by index funds and massive net buying by trend-following funds. Index funds were net buyers of 8,489 contracts to take their overall position to over 270,000 contracts. This is up from a series of lows near 225,000 contracts as recently as March. Trend-following funds were net buyers of a whopping 46,754 contracts to shift their net position back to net long of 8,671 contracts. Their position has shifted back and forth between net long and net short in recent months.
CASH NEWS AND TENDERS: Basis levels finished the week on a steady to firm note in Central Illinois last week, but levels ended on a weak note at the Gulf. South Korea is tendering for 55,000 tonnes of US or South American corn. Iran is tendering for 100,000 tonnes of South American corn.
WEATHER: The weekend saw scattered showers and thunderstorms across the northern tier of the Midwest with amounts ranging up to just 1/2 inch. The southern Midwest also saw scattered showers and thunderstorms, but amounts were heavier, ranging from 1/4 to 1 1/4 inches. Today and tomorrow are expected to be dry in most areas with the exceptions of some light showers in the east today and in the west and NW tonight and tomorrow. Wednesday may see scattered showers and thunderstorms across the region with drier conditions returning to the central and northern corn and soybean belts on Thursday and Friday. Temperatures are expected to be on the cool side to start the week, shifting to normal-to-above-normal on Wednesday through Friday.
TODAY’S GUIDANCE: Producers could get more acres planted in the next few days in Indiana and Illinois but rains on Wednesday and Friday/Saturday this week could keep planting slow and contribute to some increased concerns. The USDA news tomorrow should be supportive so short-term corrections still look like buying opportunities for new crop corn.
TODAY’S MARKET IDEAS: Short-term buying support for December corn comes in at the 431-428 zone with 448 3/4 and 456 as near-term targets.
