Tuesday, April 30, 2013
Opening Comments 4-30-13
Markets are called mixed this a.m. after a choppy mixed overnight session.
When the overnight session ended Corn was unchanged on old crop after being up a dime at one time, Dec corn was up 2, KC wheat was off 6-7, MPLS wheat off 5-6 cents a bushel, CBOT wheat was off 6-7 cents, July beans up 6 ½, and Nov beans up 3-4 cents. Outside markets have a US dollar about unchanged, equity futures are pointing towards a mixed (unchanged) start, gold is up a couple bucks, and crude is down about 30 cents a barrel.
1. Markets started firm last night with the crop progress that was a hair further behind then most had estimated; but as the night wore on we gave most of our gains back. With wheat leading some of the pressure; perhaps some of the wheat pressure is coming from the wheat crop tour which started in good areas. The couple of comments I seen on twitter were
Our first stop of the day in Riley County, Kansas, got an est. yield of 58.1 bpa. That stuff was short and young. #wheattour13”
Field 2. West of Clay Center, KS. 7.5 inch rows. Visually 54 bu yield. 64 heads per foot. pic.twitter.com/m8eQZjoWQP
Field 1. Approx 5 miles west of Riley, KS. Will head out about May15-20. Should make 60bu pretty easily. pic.twitter.com/QQ7TVAOo1G”
Keep in mind that this is expected in this area; but as they move the tour on we should see more mixed to poor results.
It still looks like Iowa and other parts of the corn belt will get hammered with moisture in the next few days; but some of the 6-10 and 8-14 day maps show normal to below normal perception chances with the exception of the far Eastern corn belt. So a slight change from yesterday. As these change the look for our market to potentially move.
Watch weather forecasts and wheat crop tour results for more market direction. Also keep in mind that some charts have went through some resistance points; but others have moved right up to resistance areas. In regards to marketing I know that one thing that Ed Usset has always done is write a marketing plan that is pro-active trying to make sales in the time period when we could see weather scares. I think yesterdays move counts as a weather scare. Listening to him speak and reading his book lets you know that the reason Ed likes to make sales in this time period is because of the strong seasonal tendencies that corn has; which is to move up towards May/June before falling off a cliff starting around July. Last year was very different and early sales didn’t work good but this year’s fundamentals and the job of the market appears to be different.
As it sits today even with a yield of 150 on 90 million acres planted we will have to find demand that we lost this past year. Very possible; but keep in mind that to only get 90 million acres we need the present fear to be reality. The yield now that won’t be decided for some time; but the stuff that does get in the ground looks like it will have good subsoil moisture. Trend line yields are close to 160-170.
Last year as the yields and drought hit the job of the market became to curb demand. That is not the case today; and for that to be the case for year over year we will have to have a complete train wreck. The job of the market is still to find demand at least until we can do a better job of pegging what our crop size is.
I think all we are doing now is adding some premium back into the market. Fundamentally things are more friendly but not nearly friendly enough to sustain much higher prices for a long period of time. So use what the market gives you wisely.
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