Afternoon Corn and Soy: Friday rally day; soy complex still lower for the week

Afternoon Corn and Soy:  Friday rally day; soy complex still lower for the week

Ag futures were finally able to put together a solidly green day across the board after a disastrous week for the soy complex. Old crop beans finished 7-9 cents higher, while new crop Nov ended 15 cents better; meal rebounded $7-10 and oil posted 1-2% gains. For the week, beans finished 48 cents lower, meal $21 lower, and oil lost 4 c/lb (or -7%). Corn ended the day 11 cents better in the May and eight cents higher in the Dec; for the week, corn managed 8 ¾ cent gains. U.S. cash markets were steady to close out the week; Brazilian meal basis was seen weaker while oil was firmer.

Early strength can likely be credited to Russian media reports that the country may consider halting wheat and sunflower exports if global crop prices continue to slide. This report was played down later in the session by Russian gov't officials, but it was enough of a nudge to allow some deeply oversold markets (particularly veg oil) to come back up for air. Wheat was the early upside leader, which in turn helped lend corn a hand. The soy complex performance was more uneven intraday, but all finished within striking distance of session highs. In sum, it was a timely reminder that the world remains a rather unsettled place.

After over one month of catch-up, the CFTC Commitment of Traders reports are finally current (or at least as current as they would normally get). The supplemental report found modest fund buying in corn and selling in the soy complex. For the week ended 3/21, large non-commercial traders (aka "funds") were net buyers of 24,835 corn and sellers of 15,697 beans, 2,020 soy oil, and 21,882 soy meal. This would leave the funds net short 52,799 corn, net long 94,993 beans, net short 25,609 oil, and net long 89,225 meal heading into Wednesday's trade.

Outside markets started the day under some pressure, with Deutsche Bank playing the role of the banking villain du jour. Markets quietly stabilized and course-corrected gradually, eventually finishing the day mostly in good stead. The S&P 500 ended the day and week slightly higher, the US Dollar ended higher for the day but lower for the week, and Crude Oil finished a little lower for the day but modestly higher for the week.

Elsewhere, China was back in for another 204,000 metric tons of U.S. corn this morning. Though the quantities purchased have lightened meaningfully from last week, the Chinese picked up another 463,000 metric tons of U.S. corn this week, or just over 18 million bushels. South American weather looks good in the short-term; U.S. weather is cool and wet? We are one week away from U.S. planting intentions and quarterly stocks reports; media estimates were trickling out today. Bloomberg's analyst range on corn acres stands out; high of 92.1 million acres, low of 87.7 (average was 90.9)? The soy acreage range was a little tighter; high 89.6, low 87.4, average 88.3 million.

In the options, vol mostly set back with today's rebound. April options expired without a lot of fanfare. Calendar spreads were mixed. The soy crush bounced back modestly after a very tough week. The oilshare was steady/easier. On the charts, the lows of a couple weeks ago ($6.06 for CK) is important support for corn, though initial levels at $6.25 CK have contained weakness each of the past two weeks. May Corn resistance is layered every dime higher starting at $6.40, which we finally cracked today. Corn is no longer oversold while momentum indicators are still pointed higher. May Beans held right at support; the $14 level will continue in that capacity moving forward. SK resistance looms at $14.60 on a rebound. Nov Beans finally managed its first positive close in thirteen sessions. SX initial resistance moves down to $13, then more significantly at $13.35. Bean Oil also bounced after a protracted downturn, confirming the 50-51 level as support. 56 cents/lb will stand as initial resistance on a rebound. Also as expected, May Meal found support in the $440 area. $470 stands as tough initial resistance for SMK on a rebound.