Risk Off as Grains Are Lower

MORNING OUTLOOK

Grains are lower. Risk off. SN is down 17 cents and near 16.67. SX is near 15.00. SMN is near 426.5. BON is near 82.96. CN is down 9 cents and near 8.03. CZ is near 7.42. WN is down 7 cents and near 10.48. KWN is down 9 cents and near 10.95.  MWN is unch and near 11.65.

US stocks are higher. Crude is lower. Gold, silver and copper are lower. US Dollar is higher.

China is on holiday. Key USDA report is May 12. US Midwest, north plains, Delta and east south plains saw heavy weekend rains. US corn crop will be planted late. C Brazil is dry. Talk of higher US corn and ethanol demand should support prices. Trades may be reducing commodity positions in front of US Fed increasing US interest rates and what that could do to demand.

Soon World wheat import demand is expected to increase. New crop Matif is making new highs as more feel lower Black Sea exports could shift demand to EU. US HRW crop could be lower. India and Pakistan is hot and India wheat crop is in decline. Dry US HRW and wet US HRS forecast could support WN near 10.40 and 11.00 KWN.

US soybean export commit is equal to USDA goal. Could increase 100 mil bu. SN tested 17.00 for first time since July and August, 2012. China to sell 500 mt reserve soybeans May 6. Lower Brazil Real increased farmer selling. April Brazil soybean exports were done 28 pct vs ly. Arg soybean crop 16 pct G/E. Harvest 46 pct.

Managed funds reduced their net corn long 19,000 contracts. CN 20 DMA is near 7.84. Resistance is 8.24. Funds are net long 173,000 soybean contracts. SN 20 DMA is 16.65. 50 DMA is 16.50. Funds are net short Chicago wheat. Lack of demand for US wheat export continues to limit the upside in wheat. WN is trading below 20 DMA near 10.76 and 50 DMA near 10.52. 10.00 is support. 11.00 is resistance.

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