Craig’s Closing Comments

April 20, 2015

Not all was sunshine and roses however as he only had one testicle and suffered chronic flatulence.  In fact he took 28 different drugs to try and keep the flatulence under control.  In spite of having a gas problem he believed he was attractive to women, so he remained single for political gain.

Interestingly enough his dad changed the family name from Schicklgruber to Hitler in 1877 or else the world would know him as Adolf Schicklgruber instead of Adolf Hitler.  It makes me wonder what would have happened if Hitler had eaten a good rib eye instead of Brussel sprouts.  My hunch is that he wouldn’t have had as much gas and without Hitler and gas the world would be a different place today.

Craig’s Closing Comments

April 15, 2015

In honor of the day I thought I would lead out with this quote by Ronald Reagan - “The taxpayer: that’s someone who works for the federal government, but doesn’t have to take a civil service examination.”

Here are a couple of other interesting tax related items:

1. Americans will collectively spend more on taxes in 2015 than they will on food, clothing, and housing combined.
2. Americans will pay $3.3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.8 trillion, or 31 percent of the nation’s income.

Finally, I would like to point out that this year Tax Freedom Day falls on April 24^th.  Tax Freedom Day is significant in that it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.  In other words as we pay our taxes today we can enjoy knowing that we only have to work 9 more days this year to pay the governmental taxes and then beginning on April 25^th we will actually get to start keeping the money we earn.  It is sure a good thing that is no waste in government or this statistic could kind of tick a guy off.

Craig’s Closing Comments

April 14, 2015

Corn:

We are in the midst of what for the most part is a weather market.  Looking at the weather forecasts for the next 7 to 10 days it appears we will continue to see the wet pattern for the Delta and Southeast. In the meantime the Corn Belt forecasts call for dryer weather in the west with wet conditions in the eastern Corn Belt.  In other words pretty much what we have been experiencing.

Looking around the fruited plains we see that for the most part the cash markets remain firm due to the lack of producer selling.

Looking to South America I see that Dr. Michael Cordonnier has left his corn estimates unchanged, pegging the Brazilian corn crop at 75 MMT and the Argentine corn crop at 23 MMT.  That compares to the last USDA report which had those crops at 75 MMT and 24 MMT respectively.

Craig’s Closing Comments

April 13, 2015

I did some thinking over the week-end and have a couple general comments on things I feel are impacting grain prices right across the board. 

1)      We need to keep an eye on the dollar.  As you can see on the following monthly continuation chart, the dollar has bounced back lately and is now trading about as high as any level we have seen since April 2003.  This makes it increasingly difficult to be competitive in the export market and thus puts downward pressure on commodities.

2)      My second thought was that I have probably been guilty of trying to trade my backyard.  I have been of the opinion that we will see some production problems this summer that will provide better pricing opportunities than we are seeing right now.  I still think that may be the case but in my veal to promote what I am seeing in our trade area I took my eye of the bigger picture.  We had the weekly planting progress and crop conditions report out today and as a part of that they give you a reading on top soil and sub soil conditions.  In South Dakota the top soil is rated at 69% short to very short while sub soil moisture checks in at 65% short to very short.  That reality has colored my perception of how I see the growing conditions and I suspect it has impacted your view of the world.  The problem is that if we look from a national perspective we see that only 24% of the country is short to very short top soil moisture while 23% is reported in the same category for sub soil.  Interestingly enough 24% is reported as having surplus top soil moisture with 19% reporting surplus sub soil.  In fact the most important number in today’s report may be the state of Ohio where they are reported as 66% of the topsoil having surplus moisture.  Wouldn’t it be interesting if we had a weather rally not because the western Corn Belt is to dry but because the eastern Corn Belt was to wet?  As hard as it is to ignore the conditions in ones backyard the most successful marketers will be able to put that aside and trade the national picture. 

3)      Since we are talking drought we may as well talk pestilence as well.  This week-end we saw the avian flu (H5N2) move from only impacting turkey producers to being confirmed in a commercial 200,000 bird chicken flock in Jefferson County Wisconsin.  This makes 20 flocks that have been impacted thus far with turkey flocks accounting for the other 19.  If this continues to spread it will have a negative impact on feed demand.

Craig’s Closing Comments

April 10, 2015

Yesterday I ran the latest drought map and thought I would follow up on that a little bit today.  According to the latest report from NOAA the past three months are the driest first three month of a year that we have experienced since 1988.  For those of you that can’t remember that far back I can attest that it was extremely dry that year.  In fact I have vivid memories of seeing two trees fight over a dog.  Here in good old SD we actually set a record this year for the driest January through March on record.  As you could see from the map last night, the drought has continued to expand with 36.8% of the USA now experiencing a drought of some type or another.  I would be the first to admit that rains could show up at any time and give us a heck of a crop but right now it sure looks like it could be an interesting year.

Craig’s Closing Comments

April 9, 2015

With the April USDA report now behind us I am guessing we will soon be back to trading domestic weather and once that happens I would be willing to bet my first born son that we will hear a lot of drought talk.  The latest drought monitor map was released today and would seem to offer some reason for concern.

Craig’s Closing Comments

April 7, 2015

As you can see on the following chart, the dollar traded sharply higher today and that in turn put price pressure on the grains.

Craig’s Closing Comments

April 6, 2015

Although corn ended the day with minus signs it wasn’t a horrible day.  We kicked off the day with the weekly export inspections report which, at 40.459 million bushels, was above the top end of the range of trade guesses.

The market was also aided today by talk about the planting pace of the crop here in the USA.  We continue to see the Delta experience delays as a result of wet weather while in the Midwest we are seeing rains this week but warmer and drier weather next week could help farmers pick up the planting pace.

Pressuring prices today were ideas that the April 9 stocks report will reflect an increase in stocks.  The March report gave us a projected carry-out for 2014/15 of 1.777 billion bushels and the average trade guesses heading into this month’s report is that we will see a carry-out of 1.857 billion bushels.  The range of guesses is currently running from 1.75 to 1.999 billion bushels.  While anticipation of Thursday’s USDA report was perhaps the largest bearish factor today the market was also pressured by a USA dollar that was moving higher today as well.

At the present time two of my three technical indicators are bearish both the old and new crop futures as we continue to trade in what is essentially a sideways pattern.

Craig’s Closing Comments

Craig’s Closing Comments