Grain Market Chatter Closing Comments 02/09/2015

Craig’s Closing Grain Market Comments

February 09, 2015

USDA’s February supply/demand report out tomorrow morning at 11:00 am.

            Current Estimates are:       

                        Corn                           1.817 - 2.002 or an avg of 1.879 vs. the current 1.877

                        Beans                        356 - 440 or an avg of 398 vs. the current 410

                        Wheat                        595 - 730 or an avg of 689 vs. the current

As you can see by the numbers, most are not looking for this report to be a real big game changer, but the USDA isn’t very predictable.  Stay tuned.

Corn:

Corn managed to muster gains today on the coattails of a lower dollar and a rise in crude prices.  The understanding that very little farmer selling is happening in the real world is probably adding some support to prices for the short-term.

Weekly export inspections came in at 27 million bu vs. 26.04 last week and 27 last year. 

Technically, all three indicators are currently bullish the March corn futures.  Wow, it’s been a while since I could say that.  We are finally trading over the 10-day moving average and above the $3.84 resistance mark at today’s close.  The stochastics; however, are already bumping against overbought territory and seem poised to turn.  If you are looking to get a few more old crop bushels on the books I would be looking at $3.96 and $4.17 as trigger points.

Soybeans:

Oils were supportive of beans today as soyoil gained on soymeal and palm oil firmed on talk Indonesia may increase biofuels.  Rumor that rains created harvest delays in Brazil may also have spurred some buying on the premise that this would extend the US export season. 

Export inspections were at 54 million bushels vs. 57 last year and 62.5 last week.  The USDA did announce a 120 tmt sale of beans to China this morning.  All in all, demand continues to be strong while producer selling is basically at a standstill.

Technically, all three indicators are bullish for March beans as well.  We can see the past week has set us up in a nice flag/pennant or wedge formation with lower highs and higher lows each day. If we are looking at a flag or pennant, history would tell us that we are consolidating at this level before continuing the down trend.  If we have had enough days to build strength, we could be looking at a wedge formation which would be signaling a change in the trend.  I don’t know if the past 5 days have been enough to give this market some confidence or not, but I do know that the carryout number tomorrow morning with determine the direction we see this market go in the short-term.  It’s interesting to note that $9.84 continues to be a level of solid resistance.  If I was in a position to sell more old crop beans $9.84 would be my first selling trigger to shed some risk.  $10.03 and $10.25 would be target levels for additional sales.

Wheat:

A weaker dollar failed to spur Minneapolis wheat into positive territory today; although, Kansas City and Chicago wheat markets managed to close at unchanged of a little better.

Export inspections came in at 14.6 million bushels.  That’s at the top end of today’s guesses, but still well behind last week’s 15.3.    Expectations for tomorrow are a small reduction in world ending stocks and an increase in US stocks.

Keep your ear on the Ukraine situation with more deaths reported today.  If Putin is to escalate the conflict there would could see support in the futures.

Once again, technically, all three indicator are bullish the March Minneapolis wheat.  The stochastics are poised to tip short of the overbought territory; however, the MACD and moving average still remain strong.  In the nearby Minneapolis my target levels would be $5.94, $6.10 and $6.27 if we could muster some strength in an upward move.  The indicators are also bullish the nearby Kansas City, here I would be targeting $6.00 as a selling trigger.