Corn: Old crop/new crop fundamental look

Corn (NYBOT:JCN14)

Today trade spent almost the entire day trading neutral to just slightly higher as the rain was falling. Support was seen due to rain actually hitting the ground but a large amount of buying was not seen as traders eagerly await the planting pace number this afternoon. Throughout trade the analysts were looking for a pace of 21% to be seen today. Tomorrow’s trade direction could be highly dependent on what number is seen for planting this week. Longer term direction will still be dictated by day to day weather map updates…Ryan Ettner

Old crop traders:

•           Corn inspections seen today came in at 1.1M bushels, seen as slightly bearish compared to last week 1.6M

•           July is currently close to the middle between support and resistance on the chart

New crop traders:

•           Trade spent the day expecting planting pace to be 21% vs the 5 yr of 28% and 5% last year

•           Rainfall maps were slightly drier on both the 1 – 5 and 6 – 10 day maps at noon today

•           IA, MO, IL, NE and parts of NE should have seen active planting recently

•           OH, MN and the Dakotas likely saw little to no planting

Bulls:

•           The drawing line for a bullish or bearish reaction tomorrow to the planting pace stands at 21%, USDA reported 19% planted

•           Now that wet forecasts have bounced the corn, bulls need to see even wetter maps over the next few days

Bears:

•           Today’s slightly drier maps helped bears but as with the bulls they will need to watch updates daily

•           Current chart levels put corn at middle-of-the-road leaving selling possible but no need for a turnaround here

Trade Recommendations:

•           (4/28) Sell December corn 520, risk to 530, objective 505

•           (4/28) Buy December corn 492, risk to 485, objective 510

 

Soybean (NYBOT:JSN14)

Old crop beans continued to find strength as short covering before first notice day supported the move higher. Some were pointing to better crush margins in China as the reason for the rally. The crush margins have improved recently but they are still in the red. Others point to the fact that China was pricing beans out of Brazil for July and Aug delivery for the reason for today’s strength.  That should not shock the trade as China needs to buy on average 1.3 mmt of beans a week to reach the USDA import goal.  So even with the recent cancellations for bean purchases, now they no doubt will need to keep  buying beans for late summer delivery. Today’s beans inspection were viewed negative coming in at 254,299 tonnes vs last week’s 153,963 tonne shipments.  We would look for shipments to continue to dwindle in coming weeks as China has pretty much taken delivery of all their bean buys.  The overall trend of the bean market continues to be higher and a close below $14.44 would need to happen to take out the long term trend. Near term support should be found at last week’s low at the $14.60 ½ level….Jim McCormick

•           Stand Aside

 

Wheat (NYBOT:JWN14)

Wheat finished mixed to higher today as the Wheat Quality Council tour moved through Kansas to estimate the potential for wheat production for the year. With Kansas dealing with dryness, we could see some interesting results with the crop estimates coming in below last year. Currently the trend is still very much up and though we haven’t taken out the recent highs, near 718 1/4. If we do take this out, we could see this market move towards the recent highs of 725 1/4. In the past 10 years the tour has been fairly close on their estimates with only a few years drastically off. Recently we have seen the tour do a better job of determining this crop’s potential but the market will pay very close attention to these numbers until we see a USDA report. The next USDA supply and demand report will be on May 9th. The Ukraine and Russia standoff doesn’t appear to be moving in the right direction and this could continue to support the market. Weather will also be the focus for this market right now and until we see good rains fall in much of the hard red winter growing areas we will continue to hear about crop stress. Planting numbers for spring wheat came in at 18%.

•           Israeli group tenders for 60,000 tonnes of feed wheat

•           Maldives tenders to buy 6,000 tonnes of wheat flour

•           Philippines purchases 52,500 tonnes of Australian feed wheat

•           Wheat inspections 631,021 tonnes compared to last week’s 508,128 tonnes

Trade Recommendations:

•           (4/17) Buy July Chicago wheat 663 1/2, Risk 643 1/2, Objective 704.

•           (4/22) Buy July Minneapolis wheat sell July Chicago wheat @ 40 Risk that to 27 with an objective of 80

 

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