Tuesday, March 26, 2013
Closing Comments 3-26-2013
Markets closed mixed today behind pre-report trading, firm outside markets, and some weather concerns.
Corn was down 3 cents a bushel, soybeans were up 11 cents a bushel, KC wheat was up a dime, MPLS wheat was up a nickel, CBOT wheat was up 4, the equity market bounced with the DOW up 112 points (looks like the bull market is back on), the US dollar was near unchanged with the cash US Dollar index at 82.858, and crude was up 1.40 a barrel.
Not a bad day for the grains; with a lot of strength for wheat seen in the finally 5-10 minutes of trading. Corn even though it didn’t manage to close positive did close a nickel off of its lows; all in all not a bad day; but technically a day that seemed to help markets consolidate ahead of a report. I view the consolidation happening at some areas that should allow for a big move one way or another; i.e. right up near resistance on the wheat/corn charts; so Thursday’s report will either help the charts look like a clear breakout should the report be bullish or a nice head fake or failure at resistance. It is nice how charts and fundamentals seem to tie up together; it’s just too bad that we don’t also have clear direction whether we will fail at resistance or break threw and make another leg higher.
A couple news items out today besides the pre-report talk included freeze talk with some possible damage done to some of the HRW wheat in areas that have it jointing such as parts of OK; overall it doesn’t appear that a lot of major damage was done; but it is one of those things that really might not be known until the combines hit. Temps are expected to warm up next week; but that doesn’t mean we won’t have another freeze scare at some point in the future.
Talk that Egypt is very low on wheat inventory has also been around; but it also sounds like they won’t be in the market buying for a couple of months.
Basis is weaker or at least feels weaker for corn and winter wheat. I had a train out today that was bid 10 cents less then it was a weak ago despite very similar quality. Also still not finding much for corn bids and the bids that I have seen are rather soft on basis.
The birdseed market felt a little better today with a little more interest; but still overall on the slow side.
Report is out on Thursday; I will be out of the office the next couple of days but Jordan, Dan, and Kevin or your local station managers will be around if anyone is looking to take a little risk off the table ahead of the report. My bias is a little negative corn and friendly wheat; mainly because of the fact everyone seems to be bullish corn and I think wheat has had decent demand as of late. I also think that perhaps we used a little more wheat for feed and thus less corn; but I guess only time will tell.
After the report it really feels like old crop corn will go to trading demand as will old crop soybeans. Wheat should really become a weather market as should new crop corn/beans. How important weather will be will depend on how many acres we get; the more acres the less important weather will be and vice versa. The other thing we will need to watch will be money flow and the funds.
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