Grain Market Chatter Closing Comments 03/19/2015

Craig’s Closing Comments

March 19, 2015

I spend a lot of time looking at technical indicators and using them a signs to determine if a market is good or bad.  With that in mind I thought the following was appropriate.

Corn:

I want to start off the corn discussion by looking at the recent drought map.

As you can see by the above map we are now in a situation where 34.7% of the contiguous U.S. is in some type of drought.  This is up from 31.6% last week.  With the anticipation of decreased acres I think the trade will be more sensitive to drought and if this continues I would look for fireworks at some point this summer.

Speaking of planted acres, we will get the USDA numbers on March 31 but of course some of the private will be floating out their guesses prior to that. We will get Informa’s numbers tomorrow.  In their most recent stab at it they estimated USA corn acres at 88.6 million versus the USDA Farm Forum Outlook which pegged planted acres at 89 million acres.

We had the weekly export sales numbers out today.  For corn they came in at 19.8 million bushels.  This was right at the very low end of the trade estimates but was higher than the amount we need to average weekly to achieve the USDA projections.

In South American news I see that Argentina’s Rosario raised their corn crop estimate 1.0 MMT to 23.5 MMT.  Thus far farmers in that nation have sold 23% of the crop, up sharply from the 12% sold at this point last year.

At the present time two of my three technical indicators are bearish both the old and new crop futures. 

Soybean:

Informa will take a shot at projecting planted acres for soybeans tomorrow.  When they threw out a projection a month or so ago they were estimating planted acres at 88 million acres.  In February’s USDA Farm Forum the USDA folks used a projected number of 83.5 million acres.  I personally saw that number as a sign that medical marijuana use is up sharply in our nation’s capital.

The weekly export sales numbers showed a flight of China to South America.  For the week we had 12.56 million bushels in sales which were about mid-range of the trade guess.  It is kind of interesting to see who the customers were for the week.

In South American news we have Argentina’s Rosario maintaining its soybean crop estimate at 58 MMT.  I am getting reports that Argentine farmer selling is at 16% versus 13% a year ago.

At the present time two of my three technical indicators are bearish the old crop while all three are bearish new crop futures. 

Wheat:

Weather continues to play a role in this market with the afore-mentioned drought problems.  We are also reports of freeze damage from last fall in areas of Northwest Kansas as the winter wheat crop continues to come out of dormancy and damage can be assessed.

Weekly export sales checked in at 14.4 million bushels.  This was at the low end of trade guesses but still larger than the weekly number we need to average to hit the USDA annual projections.

Looking at the new crop we will get the Informa estimate of planted acres tomorrow.  The last time they released a report they projected 54.8 million acres which was a bit less than the 55.5 million acres used by the USDA in February’s Farm Forum.

In international news I see that Russia reported grain stocks on March 1 at 26.1MMT, 15.1% more than on the same date last year

At the present time all three of my technical indicators are bullish the Kansas City July futures while two of three are bullish the same month for Minneapolis.