Grain Market Chatter Closing Comments 02/18/2015

Closing Comments

Lynn Miller

February 18, 2015

There is a lot of money switching hands out there right now as investors don’t know where they want to be.  A higher dollar is limiting the upside of commodities and so we see money flowing into the US Stock market. The S&P 500 posted its second record close of the year and the NASDAQ is within pennies of breaking it’s all time him from 2000.  No one know if it’s the uncertainty in Europe, strength of th dollar, ISIS, Russian military movement or the financial uncertainty in China, but managed money continues to find safety in US equities.

Next on the docket – USDA reports.

We have three USDA reports due out in the next 30 days, all known to be market movers at one point or another.  Released 2/19- 2/20 the USDA Ag Outlook, 3/10 Quarterly Stocks and 3/31 Planting intentions.  Be sure to be paying attention – changes to your marketing plan may be needed over the next few weeks.

Corn:

There isn’t much out there for newa today, not good or bad, and therefore, no good reason that I can find for today’s sell-off.  Traders have their eye on the second-crop corn acres in Brazil that are now lagging behind.  US Ag Outlook Forum starts tomorrow so the discusion of potential corn acres will become real.  Trade has been talking 88 million with some shifts now to 89 or even larger.  Look for info coming from the forum to influence the market with the lack of new news.  Last year’s conference sparked a rally of $0.60 in corn. 

Technically, 2 of 3 indicators have turned bearish as of the close today.  We closed right on support at 3.84 although below the 10 day moving average.  The stochastics are issuing a sell signal.  The MACD is turning, but right now is the only bullish indicator we have.  If we can manage to hold above support maybe we could see a little bounce in here.  A sale at $3.95 would be my first goal with $4.17 the next level.  If we can’t old at $3.84, the next leve of support is at $3.74.

Soybeans:

Part of yesterday’s rally was based on thoughts that the S American farmer was selling – no news of sales today to back that up.  I, for one, am apprehensive we will see heavy selling of beans out of S America with their inflation on the rise the farmer will probably want to hold on to capital.  At this point Brazil is only about 15% harvested and has shipped only ½ as many beans to China as they had this time last year. 

Technically, even after double-digit losses today, all three indicators remain bullish the March futures.  We did close below support of $10.07; however we continue to be trading above the 10-day moving average.  The stochastics are approaching over bought territory and tipped hard today, though not issuing a sell signal at this time.  Once again we have put in an outside day lower in all months.  With the overnight highs higher than yesterday and the day session lows lower than yesterday.  If I had beans in the bin I would seriously be considering a sale at these levels.  $10.05 is the first target I would have with $10.60 or so the next level that I would pull the trigger.

Wheat:

Wheat is a mixed bag as far as fundamentals go.  You can be on either side of the ball right now.  Bulls think we will see weather complications in the US, continued military uncertainty in the Black Sea and global quality issues.  While the bears are pointing to large world stocks, lack of US export business, cheap wheat in other parts of the world and new competion from Australian exports.  At the moment, the bears appear to have the upper hand and I believe patience maybe needed here.

Technically in the Minneapolis, 2 of 3 indicators remain bullish for the time being.  We closed below support of $5.94 and right on the 10-day moving average.  The MACD is still supportive; however, the stochastics are issuing a sell signal.  We need Putin to do something irrational and give us a boost.  With some help like that it might be hopeful to look at $6.25 and even $6.80 as old crop targets, but without some help or (sorry to say) a weather event here at home we are probably setteling into a below $6.10 for the time being.  Hoping to keep $5.40 as solid support.  In the Kansas City we have turned 2 of 3 indicators bearish trading through the moving average.  This market appears to be once again range bound betwee $5.33 to $5.74.