Grain Market Chatter Closing Comments 03/02/2015

Craig’s Closing Comments

March 2, 2015

I want to remind you that we will be having a marketing meeting in at the Agronomy Center in Bowdle at 3 p.m. this Thursday, March 5^th.  Hope to see some of you there.

Corn:

All we have been hearing the past few weeks is that we are not competitive with Ukraine and South America in the corn export market but today’s weekly export inspection number would seem to put lie to that.  Export inspections came in at 1.28 MMT which was above the top end of trade expectations.

The crop insurance guarantees for 2015 corn are now set at $4.15 per bushel down from $4.62 last year.  The assumption remains that we will see a reduction in corn acres in 2015.

Today, much of the pressure seemed to be coming due to the belief that USA farmers have a record amount of 2014 supply yet to sell. I suppose the way to deal with that concern would be for all of you to sell your corn so that the market would move higher.  That doesn’t sound like a good marketing plan to me.  At the present time the weekly export inspections are running ahead of the pace needed to hit the USDA’s projection.

At the current time two of my three technical indicators are bearish.  I find it noteworthy that we closed below the 100 day moving average today.

Soybean:

Probably the biggest news today was that the Brazilian government and striking truckers have agreed to meet on March 10th to try and resolve the annual truck strike.

With the strike seems to lose steam and the harvest progressing nicely and Brazilian farmers making more sales the path of least resistance today was lower.

Weekly export inspections came in at 23 million bushels.  This was below the low end of trade estimates and was the 3^rd lightest week of the marketing year.  The trade viewed this as evidence that the bean export program is slowing and that provided price pressure as well.

The Crop insurance guarantee for 2015 soybeans is set at $9.73 versus $11.36 last year. With beans priced at 2.34 times the corn guarantee the trade is looking for bean acres to increase from last year.

In spite of today’s lower close two of my three technical indicators are currently bullish. We did close below the 100 day moving average today but above the 10 day moving average that I use in my packet of indicators.

Wheat:

Weekly export inspections came in at 450 TMT which was near the top end of the range of trade guesses for the week.  We now have 14 weeks left in the marketing year and at this stage of the game need to average 535 TMT per week to achieve the current USDA export projection.  If I were placing odds on that happening I would probably bet against it and that may be one of the reasons that the funds were net sellers during today’s session.  Breaking that down a little further I see that so far this year we have export inspections of 623 million bushels versus 879 million bushels at this point a year ago.  A year ago we ended up with total exports of 1.176 billion bushels so at this point a year ago we had exported 74.74% of the total.  With a projected 900 million bushels of exports for 2015 we should be at 673 million bushels of export inspections thus far so are roughly 50 million bushels shy of where we probably ought to be.

There continues to be some talk that the USDA may drop their monthly US winter wheat crop ratings but judging by today’s price action the trade seems to be taking a wait and see approach to that.   

On the insurance front I see that the spring wheat crop insurance guarantee for this year is set at $5.85.  That is a pretty sharp reduction from last year’s $6.51and certainly doesn’t provide any incentive to increase spring wheat acres this year.

At the present time all three of my technical indicators are bearish both the Minneapolis and Kansas City May futures.