Craig’s Closing Comments
Lynn Miller
June 18th, 2015
For those of you who haven’t heard yet, here is the result of the NCFE / Wheatgrowers merger votes this afternoon.
Wheatgrowers: 1,534 yes – 995 no passes with 61% voting yes
North Central: 767 yes – 809 no fails with 51% voting no
This means the unification did not pass. Thanks to everyone who took the time to vote.
Corn:
Right out of the shoot this morning we had export sales numbers. Once again, they were not disappointing and were at the high end of the trade guess or even better. Old crop sales came in at 627 tmt vs. expectations of 400- 600. New Crop came in at 200 tmt right at the top end. Even though sales have been good as the dollar relaxes, very few think we will actually meet the USDA numbers with cheaper corn in SA and the Black Sea.
Basis levels have a firmer tone due to tight farmer holding and now logistic issues due to river flooding.
Corn wasn’t really on the defensive today, but we couldn’t get anything going either. A lower US dollar couple with talk that the late spring may be limiting yield potential are both offering support going into the USDA’s June 1 stocks report.
Technically, two of three indicators remain bullish in the July futures; however, today’s price action is testing the moving average. The MACD is pretty flat and the stochastics are in neutral territory, so this market really just needs something to give it direction. I would be looking to make old crop sales at the $3.68 mark. That will lend you $3.25 cash corn at Craven/Bowdle/Warner and would be a good start while basis levels are still decent.
In the New Crop, two of three indicators are once again bearish with support at $3.62. If you need to get some new crop bushels on the books my first target level would be $3.80.
Soybeans:
I am pretty sure the shorts read that today was international panic day. I guess I would panic to if I was short this nearby market with the recent trade action. Fundamentally, we are finally trading some weather. We are actually trading a lot of rain which brings with it planting delays. If the weather continues to be dry we could very well see 2 million acres lost across Missouri, Kansas, Indiana. But I must admit as much as like an opportunity to price grain, we are pretty short sighted if we forget about the huge stock piles of beans around the world. Be sure to take advantage of the good prices this market is giving you.
Technically, all three indicators are currently bullish the July futures. We have a few interesting things going on. First , the closing action of Tuesday’s market pushed old crop beans out of a downtrend they have been in since May 2014 – Woo hoo. Second, today’s action pushed us over the 100-day moving average. Good and bad of it is we could see some stops come into play here and may come under some selling pressure, so I would be getting some orders in to cover old crop beans. $9.00 cash is probably a good place to be with resistance at 9.89 and $10.09 in the futures.
Pretty much the same is true in the New Crop; however, we haven’t quite hit the 100-day moving average. That is at $9.50. I would be looking to get some harvest delivery bushels on the books at the that level.
Wheat:
We can’t seem to catch break in the wheat market. Export numbers were within trade expecations this morning at 316 tmt (or 12 million bu). Demand remains slow.
Spring Wheat, yes there are quality concerns due to recent weather here in the US, but slow demand and large world stocks may limit any upside. Early harvest numbers have yields around average with normal protein. The only issue we are actually seeing so far is lighter test weights. The dry Canadian prairies are seeing some much needed moisture with more in the forecast. Russian weather is warming up. Competition prices are still below US offerings.
Technically, all three indicators remain bearish the old and new crop wheat market. I look for support to hold at $5.23 in the old crop and $5.32 in the new for now. Any rallys should be rewarded at $5.60 and $5.85 in the old crop and $5.69 and $5.92 in the new crop.
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