Craig’s Closing Comments

Craig Haugaard

June 19th, 2015

I mentioned earlier in the week that I saw some pretty good crops on my road trip last week-end.  Today I received a picture that a friend took of a corn field in Indiana.  We have been focusing on the problems caused by heavy rains in portions of the Corn Belt.  While we are right to do so we must not lose sight of the fact that many areas are benefiting from the rains.  The trade is looking at and evaluating both scenarios and trying to engage in price discovery as a result of that holistic view.  I think we would probably all be better marketers if we learned to take the same approach.

Craig’s Closing Comments

Lynn Miller

June 18th, 2015

For those of you who haven’t heard yet, here is the result of the NCFE / Wheatgrowers merger votes this afternoon. 

                        Wheatgrowers:  1,534 yes – 995 no         passes with 61% voting yes

                        North Central:       767 yes – 809 no         fails with 51% voting no

This means the unification did not pass.  Thanks to everyone who took the time to vote.

Craig’s Closing Comments

Craig Haugaard

June 17th, 2015

Corn:

The weather continued to set the direction as traders pushed corn higher based on unfavorable weather conditions for parts of the southern Plains and eastern Corn Belt. The conventional wisdom is that we will see a loss in corn acres and reduced production from all the rain in the southern Plains, eastern Corn Belt and Delta.

The only news I saw of note today was the weekly ethanol production report which showed 102.9 million bushels of corn consumed in the production of ethanol last week.  We now need to average 99.036 million bushels a week for the rest of the marketing year to hit the USDA’s projected usage number. 

Craig’s Closing Comments

Craig Haugaard

June 16th, 2015

Corn:

Corn was bolstered by the ongoing threat of excessive rain today as traders reacted to yesterday’s crop conditions report.  While the current weather conditions will probably have a larger impact on the soybean market they did attract fund buying to the corn pit today.

There is a tendency to focus on threats to production this time of year but we should also make sure that threats to consumption are being considered.  One of those threats is the bird flu.  By the time it runs its course this year it appears that 50 million birds will have been impacted.  If we assume that each bird will eat a bit more than a bushel of corn and then further assume that we will see a slow rate of flock repopulation, it becomes reasonable to suggest that we will see a 100 million bushel decline in feed use from current projections.   If all the other demand and supply assumptions remain unchanged this would push the 2014-15 carryout to near two billion bushels and could put more downward pressure on the corn market.

Craig’s Closing Comments

Craig Haugaard

June 15th, 2015

Late last week and over the week-end I took a road trip that gave me an opportunity to see a lot of the Corn Belt.  I left Thursday morning and drove to Sioux Falls and then on I 90 across southern MN, Wisconsin and on into Chicago.  From Chicago I headed south to Terre Haute, IN and then pointed it west, taking I 74 across Illinois and I 80 across Iowa.  From there I popped on to I 29 just north of Omaha and headed back to Aberdeen.  I have to tell you that I came back more bearish then when I left.  While I did see drowned out spots in places the crop for the most part looks phenomenal.  I thought maybe I would see yellow corn as a result of all the moisture leaching away nitrogen but I actually saw very little of that.  The areas I covered seemed to have good color and be off to a great start.  I will be the first one to admit that driving the interstates of this great nation is a poor way to judge the crops but if what I saw through my windshield is anywhere close to reality we have the potential for a big crop this fall.  Earlier today I did visit with a friend in Indiana who works with the plots that DeKalb has in that state and he told me that so far the crops are looking as good as they did last year.  I know that at these price levels it is hard to believe prices can go much later but if this crop comes through we may be surprised at how much lower we are trading by harvest time this fall.       

Craig’s Closing Comments

Lynn Miller

June 12th, 2015

I keep trying to put my finger on this market, and I have been really unsuccessful.  It seems there is not enough of a ‘price’ in here for anyone to get in now and make money off the board, but nevertheless, you can still do it wrong and lose money.  Most of the action we see lately is driven by the funds and their desire to see the market move.  Maybe we can’t out guess them, but we can be watching the numbers and making sales at technical levels so we don’t miss out on whatever ups we can get them to give us.

Craig’s Closing Comments

Lynn Miller

June 11th, 2015

Upcoming reports:

June 12^th – Informa updated planted acres

June 30^th – USDA June 1 Stocks Report – updated planted acreage and quarterly stocks.

Corn:

Well it was a report hang-over day today with commodities in general remaining on the defensive.  It is presumed a large amount of today’s market pressure was the unwinding of corn/wheat spreads.  All in all, the funds remained net zero on their corn position at the closing bell.

Export sales numbers were out  at 495 tmt of old crop sales and 115.5 tmt of new crop sales.  Both numbers were at the lower end of the trade guess.  

Conab is raising the Brazilian corn crop estimates.

The US Senate Agriculture Committee announced that it would launch a hearing on the Bird Flu outbreak July 7^th.

Not much else out there for news today.

Technically 2 of 3 indicators are currently bearish both the July and the Dember with only the MACD lagging.  Support in the July sits at $3.48 with resistance at $3.68 and $3.80.  It just amazes me how these markets will follow the retracements lines as we traded right up to $3.68 on the 8^th and 10^th while we waited for numbers from the USDA.  This is a good method to help you make some sales.

Craig’s Closing Comments

Lynn Miller

June 10, 2015

Corn:

First order of business this morning was the weekly ethanol numbers.   Total crush this week was an astounding 104.16 million bushels.  Stocks were only up slightly proving that American’s are driving with the summer season and lower gas prices than the past few years.  This number brings the bushels needed/week to meet the USDA estimate down to 101.185, still a big number.

Craig’s Closing Comments

Craig Haugaard

June 9, 2015

Corn:

Weather seems to still be the major driver in this market with talk of acres not getting planted and conversation surrounding El Nino this year.  Some of the private analysts that we visit with are suggesting that the planted acres will actually come in at 88.5 million versus the USDA’s current estimate of 89.2 million planted acres.  If we plug those numbers in to the following chart we get the following carryout scenarios.  The first line is the current USDA supply and demand projection.  The next three lines are three different yield scenarios.  I used the USDA’s 166.8, a 164 yield as suggested by some private analysts and the 170 that Dr. Elwynn Taylor is projecting.  That gives us a potential carry-out that ranges from 1.402 to 1.888 billion bushels.

Craig’s Closing Comments

Craig Haugaard

June 8, 2015

Corn:

We saw corn trade higher again today on spillover strength from wheat and a weaker USA dollar.  We probably also were seeing some position squaring ahead of Wednesday’s USDA report.

This afternoon we got the weekly crop conditions report.  It was left unchanged from last week at 74% good to excellent.  A year ago we were at 75% good to excellent at this point.  The planting delays in this market has gotten a lot of attention and while the USDA report today didn’t include a total % planted we did still have some individual states still reporting planting progress.  Colorado reported at 95% complete versus 79% last week, Missouri reported at 90% complete versus 87% last week, Kansas checked in at 93% planted versus 86% last week and Texas is at 93% planted versus 83% last week.  The crop is 91% emerged versus the five year average of 90% emerged.  While crop conditions may not have improved all that much with last week’s rain events, there could be significant improvement this week with forecasts for warmer temperatures throughout much of the Midwest.