Tuesday, April 23, 2013

Opening Grain Market Comments

Markets are called weaker this a.m. behind a weaker overnight session despite yesterdays crop conditions report that should have been considered friendly.

In the overnight session nearby corn was off 3-4 cents, new crop December corn was down 6, soybeans ranged from up 2 to down 3, KC wheat was down 3-5 cents, MPLS wheat off 2-7 cents, and CBOT wheat was off 7- 8 cents.  The US dollar is firmer this a.m., equity futures are firming pointing to about a positive 50 point start on the DOW, crude is off about a buck, and gold is off about 4.00 bucks.

It looks like December corn is flirting with some support that if validated could pressure the market even more.  Dec corn is within pennies of the low made April 1st or the day after the stocks report.  Why with nothing getting planted; because the forecast has turned warmer and drier and looks to allow planting to happen.  Yesterday’s crop condition report showed corn planting at 4% versus last year of 26% and the 26% on average.  Right now it doesn’t look like much will happen for the next few days; but some planting could be taking place by the weekend or early next week in some areas.  So basically the market feels like it is trading the forecast not the past or the present.

Spring wheat planting progress was only up 1% last week and that came from the PNW states; while winter wheat conditions slipped.  Some areas in HRW country were suppose to get cold last night too.  All supportive but all also old news or at least news that isn’t leading the headlines enough to have the money flowing in and buying commodities.

One thing we need to realize is that the funds haven’t exactly done super well buying grains the past few years; they have a tendency to buy at the top and sell at the bottom.  So maybe some of that needed money flow just isn’t happening?  Also plenty of news wires and banks have made plenty of statements about the commodity burst being over.  If we don’t have money flowing into our markets we will struggle to bounce as much as we would like.

It does sound like we sold more new crop soybeans to China once again; but we need the demand for the old crop as that is where bull markets typically start.

Stats Canada will have their numbers out Wednesday morning for acre estimates.  Keep in mind that with areas of the Dakotas behind in planting so are the areas north of us.  We could really use a smaller Canadian wheat crop as they haven’t helped our price or basis this past year as it seemed like they always had wheat for sale cheaper than the US.

Spreads remain firm but so far not firm enough to let the board get up and rally.

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