Grain Market Chatter Closing Comments 02/17/2015

Craig’s Closing Comments

February 17, 2015

Late last week there was a young man from Georgia that went to Spain to run with the bulls.  As you can see from the following picture he probably should have saved his airfare and spent his free time studying or something.  Anyway, I think this is a pretty good illustration of what the folks bearish the bean market feel like after the past couple of sessions.

Corn:

With the beans running today we saw corn attempt it as well but it just could really muster any strength as it traded both sides of the market.  We did see a little better crude oil price coupled with a weaker dollar today which was marginally helpful to corn prices.

The only real fundamental news that I saw was in weekly export inspections.  For the week they checked in at 28.5 million bushels.  Based on the recent USDA annual projection we need to average 34.9 million bushels of inspections weekly to achieve their target.  We will either need to see the pace of export inspections pick up or at some point see the USDA reduce the estimated annual export number.

At the current time all three of my technical indicators are bullish although it certainly appears that we are in a sideways trading range market at the current time.

Soybean:

We had two pieces of news today and frankly neither of them seemed to suggest the type of price surge that we experienced during today’s session. 

The monthly National Oilseed Processors Association (NOPA) was out today and reported that here in the good old USA it’s members crushed 162.675 million bushels of soybeans during January.  This was down from 165.383 million bushels crushed in December but was in line with the average trade guess of 162.673 million bushels.

The weekly export inspections number didn’t hold any big surprises.  The number, coming in at 49.1 million bushels was down a bit from the last weeks at 54.6 million bushels but well ahead of the weekly pace of 10.9 million bushels that we need to attain to hit the USDA projection.

News from South America was limited but seeming to continue to point to a record crop.   Dr. Michael Cordonnier was out with a report today in which he increased his estimate of the Argentine soybeans crop by 1 MMT to 57 MMT and left Brazil at 93 MMT.  The recent February USDA estimates of 56 MMT and 94.5 MMT respectively.

All three of my technical indicators are currently bullish.  In the March futures we closed above the 100 day moving average today which could signal some follow through to the upside.  What I find most interesting is that if we look at our old buddy Fibonacci it would suggest that the $10.06 area should provide resistance. We closed a bit above that today and it will be interesting to see if we can now move on to the next resistance level of $10.37 or falter in this area.

Wheat:

Weather and the situation in Ukraine have been the two major market drivers of late and that was the case again today.

On the weather front the expectation is that fairly cold temperatures are going to hang over the USA winter wheat areas this and next week. There are mixed ideas as to whether or not the crop will suffer any significant damage from the cold front moving through the area although some folks that I have spoken with feel that up to 15% of the SRW crop could be in danger of damage from the cold temperatures. 

The Ukrainian town of Debaltseve is still under siege by pro-Russian separatists. Rebel commanders there told news agencies that they did not consider the town to be part of the cease-fire agreement that went into effect over the weekend.

Weekly export inspections continue to disappoint.  Today they came in at 14.8 million bushels, up slightly from 14.6 million bushels last week.  To achieve the USDA annual projection we need to average 18.9 million bushels per week.

At the present time all three of my technical indicators are currently bullish both the Minneapolis and Kansas City March futures.