Grain Market Chatter Closing Comments 03/30/2015

Craig’s Closing Comments

March 30, 2015

Corn:

We had a mixed bag today but were able to post a higher close.  Weekly export inspections were announced at 30 million which was below the low end of trade expectations but we also had the announcement of a sale to “unknown” which helped ease the sting of that report.  For the year export inspections are now at 48.7% of the USDA annual projection and this is 5.2% behind the pace of exports we have experienced over the past five years. 

We continue to see early planting lag although it is picking up some steam.  In Louisiana 16% of the corn is now planted versus 1% last week and 81% average while in Arkansas 2% of the crop is in the ground versus the five year average of 28%.

Traders spent the day positioning ahead of tomorrow’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.

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

Soybean:

Weekly export inspections for beans came in at 24.1 million bushels.  This was above the top end of the trade guesses as well as being the strongest number we have seen in five weeks.  That helped get the market off to a stronger start and attracted some fund buying.  As we headed to the close we saw an uptick in farmer selling as well as funds dumping some longs and heading to the sidelines ahead of tomorrow’s report. 

Once we get past tomorrows report I would expect the trade to shift back to talking about South American logistics, Chinese demand and USA weather.  It should be an interesting summer.

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.  Last year we had a total of 83.701 planted acres of soybeans in the USA.

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

Wheat:

Weekly export inspections came in at 11.8 million bushels.  This was less than the trade was looking for and in fact was the weakest number we have had in the past 9 weeks.

Crop conditions slipped some this past week with Kansas wheat now rated at 39% good to excellent, down from 41% in that category last week.  Slipping conditions and a lack of major moisture events in the forecast created the environment needed to drive the market higher today.

In light of what was going on in our market today it was interesting to look at Russia where we are seeing Russian grain traders delaying the signing of forward deals for new crop wheat due to the risk that a wheat export tax could be extended.  Wheat prices in Russia have now dropped for five consecutive weeks as a result of increasing supplies in the domestic market.  Part of the price decline can be attributed efforts by the Russian to cap exports, but according to SovEcon most of the price pressure is the result of the market being flooded with wheat as farmers clear out old grain from storage facilities to make space for the new harvest in July.

Heading into tomorrows 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.

At the present time all three of my technical indicators are bullish both the Kansas City and Minneapolis July futures.  I think it is also noteworthy that both of these contracts gapped higher today.  We should get some follow through to the upside but in this market I would not be surprised to see the market to retreat and fill the gaps at some point.