Craig’s Closing Comments
Craig Haugaard
June 22, 2015
Watching the market the past few days I keep thinking of my cousin Jimmy whose favorite saying is, “If you mess with the bull you get the howns.” I am sure that more than a few traders that were short these markets feel like they got the horns. As a sideline, it bugs the snot out of me that slow cousin Jimmy can’t pronounce the letter “R.” A few years ago the family sent him to a speech therapist as a Christmas gift which in retrospect was a crappy gift. Kind of like someone sending me to Weight Watchers as a present. If my kids ever did that I would cut them out of the will. Anyway the therapist told him that the inability to pronounce R is called “Rhotacism." That kind of sent Jimmy off on a rant. If I remember correctly his exact words were, “Awe they fweakin kidding me!! I can’t pwonounce the lettew and the name they give it stawts with the fweaking lettew so I can’t even tell anybody what I have.” I did work with him trying to get his to practice saying, “Richard runs around the rock” but the best he could ever do was “Wichawd wuns awound the wock” so I finally gave up and have and just resigned myself to the fact that is just the way Jimmy is goiong to be. Now, back to the markets.
Corn:
This springs weather challenges have many in the trade believing that we will see both reduced planted acres as well as a compromised national average yield. This thought process led to fund short covering today and allowed the December futures to close above the 50 day moving average for the first time since late March.
At the present time all three of my technical indicators are bullish both the July and December corn futures.
Soybean:
We really didn’t have much to talk about in the market today but in light of yesterday’s planting progress report you don’t have to be a rocket scientist to note that only 51% of the bean crop in Missouri has been planted and that this probably means a reduction in planted acres this year. One of the most aggressive numbers that I heard today was the suggestion that we could see 8 million acres not get planted. With that in mind I took the USDA June 10 numbers and left them unchanged except I adjusted planted and harvested acres downward by 8 million acres. Some would argue that the national average yield that they are using is also too aggressive. If we took that down to a 44 bu/acre national average yield we are suddenly looking at a negative carryout which is impossible and would mean we need to take prices high enough to kill off some demand. I spent all winter thinking the beans were going to be the dog this year. I may very well have been wrong in that thinking.
At the present time all three of my technical indicators are bullish both the July and November soybean futures.
Wheat:
We had a big day in the wheat market as traders reacted to talk of problems harvesting winter wheat and the low quality of the wheat being harvested. The day could have been even bigger but with harvest going on we did see pressure from hedging that kept the bull from totally running wild. The market was also supported by talk that we will see lower production coming out of Canada, EU and Russia.
Two of my three technical indicators are bullish both the Minneapolis and Kansas City September futures.
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