Grain Market Chatter Closing Comments 01/23/2015

Craig’s Closing Grain Market Comments

January 23, 2015

Export Numbers today:

                                                     Actual                                    Trade Guess

                        Corn               2,185,400 MT            vs        800,000-1,000,000

                        Beans                 14,100 MT            vs        400,000 – 700,000

                        Wheat               458,400 MT            vs        200,000 – 400,000

The Dollar continues to find strength and crude continues to fall.  Historically, a bad combination for US grain markets.  Funds were net sellers of approximately 2,000 bean and 1,000 wheat contracts today and buyers of 6,000 in corn.

Corn:

Well, we definitely didn’t get the reaction I was hoping for on the open after the announcement that export sales were 200% of the average trade guess.  I was prepared for this market to make a nice knee-jerk reaction to the upside since we finally got some game on in the realm of world trade, but nothing real exciting came from it.  All in all the little $0.03 we got today just kept us unchanged for the week. 

Cattle on feed report was out after the market close tonight.

                                                               ACTUAL         Mln head                            RANGE             
On feed January 1                                      101                10,873                              101.2-102.4         

Placements in December                             92                   1,544                                93.0-99.4           

Marketings in December                              95                    1,655                               92.3-97.0           

January placements up 1% from a year ago.

Initial Reaction to these numbers was neutral to positive due to lower placement numbers in December and slightly less on-feed supplies.

Technically, we traded an inside day today.  Meaning the high was less than yesterday’s high and the low higher than yesterday’s low.  We managed to close above that magic number of $3.84 today (whichi is supportive)  The stochastics have issued a buy signal.  The MACD is coming together.  Can all this together mean we are preparing for some kind of a technical bounce?  Do you have your targets in to capture that?  I would be looking at $3.95 and $4.17 respectfully.

Soybeans:

Net sales of 14,100MT, that translates to a mere 500 thousand bushels, didn’t do much to help push bean prices up toady.  Cancellations over the past week have taken a toll and show exports prematurely backing off.  It still remains to be seen what the S.American harvest pace will be as well as their final crop size and export pace.  Then there’s always the question of how fast will the farmers sell.  With the economy issues down there, some will hold beans rather than take worthless money.

Technically, nothing is changing very fast in the bean market.  All three indicators continue to be bearish, however, the nose dive we were watching the stochastics perform is leveling off.  The $9.85 mark that I had been hanging on to basically gave out today as not only did we close below it for the 4^th straight day, but we never even managed to trade up to it.  This has now opened the door for a move back to the area of $9.22.  Don’t give up on a dead cat bounce; however, if you need to cover binned or DP bushels I would be placing targets at the $10.00 and $10.25 levels.

Wheat:

This market ended the day mixed as weekly export sales were strong from HRS and HRW offering resistance in the Chicago markets; however, support of the Minneapolis and Kansas City.  Some selling today can be linked directly with the strengthening dollar.  No news about the Russian/Ukraine situation kept everything pretty quiet for a Friday.

Export numbers were good today at 458,400MT.  This is up 61% from last week and 69% from the previous 4-week average.

Bang, Bang, Bang goes the drum.  We continue to show nothing but bearish in the technical indicators in these wheat markets whether we are looking at Minneapolis or Kansas City.  Support in the Minneapolis remains in the area of $5.40, which should prove to be substantial, while support in the Kansas City is at $5.57.