Grain Market Chatter Closing Comments 03/11/2015

Craig’s Closing Comments

March 11, 2015

Corn:

Finally, we have a little bit of fundamental news to trade today – Ethanol.  The weekly ethanol numbers are out.  Last week we chewed through 99.12 million bushels of corn increasing production 13,000 barrels per day over last week.  We also saw stocks decline substantially for the first time in nearly 10 weeks, down 300,000 barrels.  Also on a good note, ethanol margins though not great, are improving.

Looking forward, there appears to be some skepticism out there about the USDA’s export numbers.  Probably why we didn’t see this market react to the one bit of good news we have had lately.  With the dollar screaming higher (probably fueled by talks of a war declaration) no one really believes that we will all of a sudden become price competitive and see sales soar.  And to support that thought, there have been no new sales reported this week.

Allendale is pegging planted corn acres at 88.5 million vs. the Farm Forums 89.  I’m not sure if we will see corn rally with a smaller acre number in the planting intentions or if the smaller acreage number is figured in already and waiting for confirmation.

Traders are talking about a weakening Euro which could be a driving force for French corn to trade into the Eastern US coast.  This has not happened in recent history, but it is being watched.

Technically, the see-saw action of a choppy sideways market continues with all three indicators once again in full-buy mode. After closing below the 10-day moving average yesterday we are once again on the right side.  I would be looking at the top-side of this range to make my next old crop sale, that’s right at $4.00 futures.

Soybeans:

Yes, Yes some fundamental news in beans today as well.  Well, I guess just a little, but in the current environment we will take about anything.  Overnight gains were spurred by Asian buying.  Argentina’s 3-day strike on grain sales started today!  Will it play big into our favor, oh, probably not but it’s still something.  Also from Brazil – we have the National Day of Protest coming up on Sunday and the truckers will be meeting on March 26^th to once again discuss minimum freight rates.

Allendale was out tonight with estimated Beans acres at 86.0 vs. Ag Forum’s 83.5.  I believe the market is ready for bean acres to be higher.  We saw a nice reactionary bump on Feb 19^th when Ag Forum released their numbers, but if you remember, the gains didn’t stay long and we are now trading at levels below that release date.

Technically, in the nearby beans, we continue to see all three indicators in bearish mode.  The stochastics are approaching oversold and may just give us a little technical bounce should we get there.  Nearby resistance is at $9.93 for this move, right at tonight’s close, I would be more inclined to put my next old crop sale level at $10.10 on the May futures.  And I would probably be interested in looking at priced sales.  With the large supplies this year basis remains in limbo.  PNW offers are nearly non-existent as demand shifts to S. America and interior processor bids have not yet started to come in, with no rail rates to these locations available either.  I’m not so sure I want to carry the risk.

Wheat:

Finished higher for the 4^th consecutive day.. does that mean we have set a seasonal bottom? 

Egypt is tendering for 3.5 mt of wheat, but looking from local suppliers.  And willing to pay $55.05/kilogram unit.  The government has plans to build 25 new granaries to house 480,000 bu each (60tmt). 

Saudi Arabi is announcing they are planning record imports of corn and wheat next year in an attempt to conserve water supplies.

South Korea is buying wheat from Australia, Taiwan is buying wheat from the US.  There is talk working it’s way through the trade that Ukranian farmers are looking at reducing planted acres due to lack of financing.  Could be as much as 25%.

Technically, all three indicators are now bullish both the Minneapolis and Kansas City futures, even after today’s choppy action.  Next level of resistance in the May futures sits at $5.80 for the Minneapolis and $5.62 in the Kansas City.