Craig’s Closing Comments
February 23, 2015
Just a reminder that we will be having marketing meetings tomorrow beginning at 11 a.m. in Herreid and at 2 p.m. in Hague, ND. We are going to be exploring marketing strategy so I hope some of you are able to join us.
It was 70 years ago today that the Marines raised the flag on Iwo Jima. Evil was vanquished in that war but I guess it is never defeated it just morphs into a different form and thus we are confronted with the evil of ISIS today.
Corn:
The dollar was stronger and crude oil was weaker today and that put pressure on the corn market from the opening bell.
Weekly export inspections came out at roughly 35.5 million bushels which was above the top end of trade estimates but that was not enough to carry the day.
What did seem to carry the day was a technical picture which triggered fund selling resulting in the funds being sellers of 12,000 contracts during the session. Sellers were also emboldened by the prospect that the March 1 corn stocks could be a whopping 7.6 billion bushels, up from 7 billion bushels on March 1 last year.
At the current time two of my three technical indicators are bearish. We closed below the 100 day moving average today which could trigger additional selling pressure.
Soybean:
Beans had an OK day as they received some support from the slow Brazil cash movement. We are seeing an ongoing trucker strike in Brazil which has slowed the movement of beans. Couple that with rains that have slowed planting progress and you may have created a situation that will result in the USA getting a little bigger piece of the export business than we would have imagined a month ago. Speaking of harvest delays, I see that Safras is estimating that the Brazilian soybean harvest is 18% done versus the five year average of 23 percent complete. A year ago 31% of the crop had already been harvested.
Weekly export inspections came in at the low end of trade guesses but at 35.3 million bushels they kept us well ahead of the pace we need to average to achieve the USDA projections.
Two of my three technical indicators are currently bullish, with the stochastics currently tipped into bear mode.
Wheat:
Exports and weather continue to drive this market. One could have reasonably expected that the extremely cold temperatures in the upper Midwest could have provided a spur to get this market going but apparently nobody has any real concerns about winterkill at this point.
On the export side of the equation the news continues to be grim. Weekly export inspections came in at 18 million bushels. I see that Egypt cancelled the tender for USA wheat as prices were too high. The USA offers came in between $287 and $336/ton versus offers from the French and Romanians which checked in around $236/ton.
At the present time two of my three technical indicators are bearish both the Minneapolis and Kansas City May futures. It should be noted that the March Kansas City futures set a new life of contract low today.
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