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Grain Market Chatter Closing Comments 2/4/2016

Posted by Craig Haugaard on Feb 4, 2016 6:22:49 PM

Closing Comments

Lynn Miller

February 4th, 2016

 

 

The dollar continues to setback today, down another 80 points to 96.495.  I expect this to retrace another 47 points to 96.010 (or to the levels of 10/22/15).  The question coming forefront in a lot of financial minds is how much is the bad debt weighing down growth?  A lot of the quantitative easing and economic policies to stimulate growth have encouraged companies to acquire debt to grow with low and in some cases negative interest rates.  The question remains to be seen if we have loaned to much to too many.  An article I read today says that China cares a bad debt of $5 trillion dollars.  Lending is also going crazy in Brazil.  Let alone the amount of money that has been loaned in the US since 2008.

 

Corn:

Weekly export sales shone bright this morning at 1.129 mmt in new sales for this marketing year.

Despite good exports, corn prices reversed early gains (at new highs) to close lower putting in an outside day lower.   YTD sales and shipments are running behind USDA expectations and last year’s levels.  The question is, will the dollar deteriorate enough to make us competitive on the world stage?

Technically, two of three indicators are now bearish the March futures.  We closed below the moving average and the  stochastics are in sell mode.  Support continues to hold at $3.62.  My next sales targets would be $$3.72, 3.79, $3.85 and $4.10 if we can retrace to our high on October 8th.

 Grain Markets Corn Futures Chart

 

Soybeans:

Weekly export sales were poor this morning at a -43.7 tmt.  To break it down, that is 331.2 in new sales and 374.9 in cancellations from unknown.  For what it’s worth Spain and Japan were the biggest buyers for the week.  65.7 tmt were also booked for 16/17 shipment.

Argentina production increased to 58.5 million tons on good weather which results in higher yields.  And stats Canada put canola stockpiles larger than expected at 12.1 million tons.

Technically, two of the three indicators remain bearish the March futures with only the MACD remaining bullish.  $8.75 wasn’t able to hold support today either as we continue to inch downward, support now sits at $8.66.  My selling targets would remain $8.80, $8.90, $9.00, $9.12 then $9.35 if you really want to reach. 

 Grain Markets Soybean Futures Chart

 

Wheat:

Exports were off the low end of expectations today will just 66tmt for this year and 87.8 for 16/17 shipment.  A continued loss of business, especially in the option origin area, is weighing on wheat. 

Technically, two of three indicators are once again bearish the Minneapolis March futures as we put in an outside day lower today.  $4.98 failed to hold today, returning support to the contract low of $4.82.  My price targets would be 5.05, $5.10, $5.20, $5.28 and $5.39.

 Grain Markets Wheat Futures Chart


 

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Topics: Grain Markets

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