Market ran into some profit taking today as we traded in a fairly narrow range after yesterday's big rally. We did hit fresh 7-week highs across the board as there seemed to be a stronger presence of trade scale up selling at these levels. Some friendly options were being done, but in all it was not a very busy day with volume at 26,000 futures and 14,000 options.
However, bulls can go home today happy that the 57.00 level held up in Z'07 and 51.25 in the N'07. Spreads widened back out today to a range between 560/580. The big index funds are said to be ready to start rolling their long N'07 position tomorrow as we still have over 100K open interest in the N'07.
Export sales are set to come out tomorrow and we are anticipating some where near the same as last week with 300K sales and 325k shipments which is still way below the average we need to hit the USDA export number.
The USDA will announce the May S&D numbers on Monday as we may see them make an adjustment to U.S. exports lower than the current 13.25 mb's. We are 6 business days away from July expiration and 12 from FND in futures for the N'07 as we head into the final expiration month for the 06/07 season.
As far as new crop is concerned, Georgia and Alabama are getting rain today and West Texas is drying out so this may get things back on track for the U.S. Parts of the Memphis/Eastern growing area are still very dry, but they are anticipating this will be a "La Niña" weather cyclethis summer.