Closing Comments
Lynn Miller
July 13, 2015
Corn:
Export inspections this morning kept some strength in corn with 1,056,558 reported vs. 938 last week and 925K being the top end of the trade guess. To end the day we got crop conditions. The market was looking for these to drop off slightly, but once again we are unchanged at 69% good to excellent. They continue to see declines in Illinois, Wisconsin and Indiana while the Dakotas are improving.
Other things to keep on your radar:
Argentina announced increased export licenses for corn
Brazil’s crop is still growing from 81 mmt on Friday’s report to 82 mmt today.
Speculators are switching positions from net short to net long.
All 3 technical indicators are bullish both the Nearby and New Crop months. In both months the stochastics are still bullish; however, very flat and in overbought territory big time at over 96. As far as old crop bushels go, I would be looking for $4.50 in the Sep. Did this move open the door to +$5.00 old crop corn? It may have on the charts, but I am not sure there is enough fundamentally to force another $0.50 out of this old crop market. As far as New Crop goes, if you don’t have many bushels covered I would be looking to put sales at this level. We closed just above yesterday’s resistance of $4.50 this afternoon and with that we have established new support here. I am not sure how substantial this support level will be and I look for $4.34 to be more significant. I am curious now if this market can dream up enough weather to spur us to $5.04, but I wouldn’t bank my whole crop on it.
Soybeans
Weekly export inspections came in at 134,666MT or 4.95 million bushels. This is better than same week last year, but just below the new average weekly pace of 6.66 we need to reach the new USDS estimate of 1,825 million. .
The next thing on the docket today was crop conditions. Overall beans were down 1% at 62. Most improved state was Louisiana up 14% while Indiana and Illinois conditions each dropped 4%. Wisconsin and N.Dakota have the best rated crops while Ohio, Illinois and Missouri are in the toughest shape.
Things to keep on your radar:
NOPA crush numbers will be out Wednesday.
Speculators are decreasing net long – down 1,314 contracts on a week to week basis.
Chinese imports. So far up 32% from May at 8.09mmt
Technically all three indicators are bullish both the old and new crop months. In the old crop, we are looking at a steady support line of $9.96. New resistance levels I would use to target sales would be $10.49 and $10.90. As for the new crop, I am not so positive the new level of $10.25 will actually hold as support even though we closed about it. I look for substantial support at $9.76. Right now I would be targeting NC sales at $10.64. If the market can make a big enough story out of lost acres $11.04 might become reality, but I believe that would be a very short-lived prospect.
Wheat:
Wheat gapped lower at the open of the night session, rebounded some coming into the morning break and then took off to the down-side when exports were announced at 249,787, a number w/in expectations, but not a good number. Early harvest reports out of Nebraska show varying quality. Black Sea prices are stabilizing at very low levels. The Russian export tariff has buyers concerned for how it will be calculated. Rains in Canada are a little late, Rains in Russia are slowing harvest, Rains in Autsralia are welcome while the European Union remains hot and dry.
Crop conditions tonight show the Spring Wheat crop at 91% headed – well ahead of the 5 year average. Hopefully a good sign for some quality.
Technically, not near as pretty of a picture as row-crops with all three indicators now bearish. We closed just above support today @ $5.94. Here’s hoping that level holds; however, the MACD just turned to a sell signal and the Stochastics are in overbought territory wich leads me to believe this market will set back a little farther before finding it’s legs again. My target levels for some sales after today’s action would be $6.32, $6.62 and
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