Craig’s Closing Comments
March 27, 2015
I would be the first to admit that I am not the brightest guy but for the life of me I can’t figure out how some folks think. The one that has me puzzled today was a headline that read: Six Flags to cut 18,000 trees to go solar. The Six Flags in question is an amusement park in New Jersey that has decided to “go green” and to accomplish that they are clear cutting 18,000 trees.
Corn:
Pretty slow day in the market as traders try to get positioned ahead of Tuesday’s Planting Intentions report. Heading into the report the average trade guess is that we will see 88.731 million acres planted to corn this spring. The range of guesses runs from 87.000 to 89.700 million acres. Last year farmers in the USA planted 90.597 million acres of corn.
While we are talking about planting corn here, in Argentina harvest is kicking off with the Buenos Aires Grain Exchange reporting that 7.5% of the crop has been harvested. A year ago 10.2% had been harvested so for all intents and purposes we appear to be right on schedule in that nation.
The technical nerd in me found it interesting that we experienced a key reversal lower in both the old and new crop corn yesterday although we really didn’t have any follow through today as the fear of what Tuesday’s report could bring kept the bears in check.
At the present time all three of my technical indicators are bullish both the old and new crop futures.
Soybean:
Conversation around Tuesday’s report was a large feature in the bean market today. Heading into the report the average trade guess is that we will be given a planted acres number of 85.919 million acres to play with. The range of trade guess runs from 83.100 to 88.000 million acres and my personal opinion is that we will end up closer to the top end of the range. It should be noted that as I write this I am sitting in Ipswich, SD looking out the window at snow instead of writing from a beach in an exotic locale which I would probably be doing if I were a wildly successful bean trading guru so take my thoughts for what they are worth. Last year we had a total of 83.701 planted acres of soybeans in the USA.
In South American news I see that the Brazilian truckers and the government are meeting again today. I have not heard if any progress is being made on meeting the requests of the truckers but for now the market doesn’t seem to care or else is operating under the assumption that no news is good news.
I saw an estimate today which placed Argentina’s bean harvest at nearly 4% complete compared to 3.2% complete last year. It looks like they will have sunshine and good harvest weather for the next 10 days so we should see rapid harvest progress coming from that nation.
At the present time all three of my technical indicators are bearish both the old and new crop futures.
Wheat:
We had dead cats bouncing in this market today. After the pummeling wheat received yesterday we were able to post higher closes in all three wheat pits today. A large portion of the pressure that came to bear on the market yesterday was as the result of a weather forecast which is showing a greater chance for rain in HRW country next week. We are getting close to the point where this market will start to live and die with each changing forecast.
Heading into Tuesday’s Planted Acres report the average trade guess is that we will have 55.795 million planted acres of wheat. The range of trade guesses is running from 54.95 to 56.8 million acres. Last year 56.822 million acres of wheat were planted in this country.
The Damocles sword that continues to hang over this market is the struggle that we have to compete in the world export market. This struggle may become even more difficult if the reports coming out of Russia are correct. I am hearing comments by SovEcon that the current export tax on Russian wheat may not be extended when it expires June 30th if inflation slows. If true this could be a very negative blow to USA wheat prices.
At the present time two of my three technical indicators are bearish both the Kansas City and Minneapolis July futures.
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