Grain markets are called easier today on a little pull back
from the recent strength. When the
overnight session ended we had corn off 4 cents, KC wheat off 1, MPLS wheat off
2, CBOT wheat off 2, old crop beans off 5, and new crop beans off 3. At 8:05 outside markets have the DOW mini
futures pointing towards a start near unchanged, the US dollar is off about 260
ticks with the Cash US Dollar Index at 79.548, crude is off about 1.20, and
gold is off about a buck.
Yesterdays strength came from the KC wheat tour, which
showed an average yield of 34.7, versus 43.8 last year, and 53.4 the year before. They estimated the crop 6-8 weeks from
harvest. So that opens up the question
is the tour using max potential just because of the methodology they are having
to use to calculate?
The other question this tour will end up bringing up is how
big is the crop and at what price level has the deteriorated wheat crop been
priced into the market? A smaller wheat
crop isn’t going to create any extra demand and that’s really what wheat has
missed for some time. Demand; the US
getting large exports. Don’t get me
wrong wheat does have a lot of potential but we have to have some caution as to
when the news that we are trading today becomes old news, priced into the
market.
Technically some of the wheat charts have had some upside
breakouts; but then again wheat has always been famous for head fakes.
Here are a couple links with some more info on the tour
To follow the tour on twitter use #wheattour14
The other thing that continues to effect the market has been
mother nature and planting progress.
Which continues to be a struggle for corn and beans in most areas. Many are talking about prevent plant and that
is probably a little early; but it has to be on the radar and it is a concern;
but we also have to remember that the last USDA acre estimate was on the low
side (according to many) and many thought we could increase overall acres.
In my opinion the cool weather is more of an issue then
perhaps some of the moisture. The one
thing we really will have to watch will continue to be North Dakota and what
they end up with for spring wheat acres and sunflower acres. I have heard of a lot of concern from that area
and that could lead to the crush plants getting a little more aggressive on
sunflower prices.
Speaking of sunflowers I do have some buyers showing
interest in some old crop hi oleic’s. If
you have any please give me a call.
The birdseed market continues to be soft and business has
just slowed down. It doesn’t help that
the railroad situation was so bad for so long that buyers screamed for
cars. Then it felt like we gave them 2
months supply in about a week period.
Did we miss some business along the way?
Did the rail situation cause missed demand for any of the grains? I guess only time will tell but in my opinion
we have to realize that there should be some risk in our upcoming stocks
reports just because grain that wanted to move wasn’t able to and its not like
we can magically get back that piece of business that might have been missed.
Also we are now offering a new crop ACT OF GOD program on
millet; please give us a call for more info on that.
As for “generic” grain marketing I don’t have any problem rewarding
a rally; but it really is going to depend on everyone’s unique situation. There are way too many unknowns right now;
which has added some premium to our markets; but bottom line is we need to all
know the potential both upside and downside in these markets. In my opinion if cards lay right there is a
huge amount of both potential and risk in nearly all of these grains. So find a way to get yourself comfortable for
the ride.
Here is some more market information from CHS Hedging Morning
Highlights
Morning Highlights
By Phyllis Nystrom
- As of 7:04
am CT: US dollar index down .153 at 79.655, overseas markets mixed/lower,
crude oil down $1.28 at $100.00, ULSD down 2 cents, gasoline down 1 ¾
cents, and natural gas down 2 ¼ cents.
- Chances of
showers stay in the forecast for the Midwest through Friday with temps
staying below normal.The southwestern Plains continue dry.
- Markets
have backed off overnight as weather effects may be built into prices for
the time being.Nothing new from Ukraine.
- The
Federal Reserve is expected to lower their bond purchasing program by
another $10 billion per month as their meeting concludes today.No interest
rate changes are anticipated.
- Effective
May 1st, the new daily trading limit in corn will be 35 cents,
$1.00 in beans, 45 cents for CBOT wheat, 50 cents for KC wheat, 3 cents in
bean oil and $30 in bean meal.Limits will be recalculated in six months.
- Corn is
off to a weaker start after yesterday’s planting delayed induced rally to
a three week high.First support in the July contract is $5.08, resistance
$5.24 ¼.
- Bulls need
to be fed daily and corn is due for a breather, it has closed higher in
five of the last six sessions.
- There were
no corn deliveries against the May contract.
- The CK/CN
is 5 ¼ - 5 ¾ carry, continuing to be rangebound from 5 – 6 ¼ cents.
Oilseeds
- Beans
began the evening session on the plus side, but faded after midnight and
have traded within yesterday’s range.The uptrend remains intact but prices
are approaching overbought conditions and could be due for a correction
lower.
- There were
no bean deliveries against the May.The estimate was zero to 250 contracts.
- Meal
deliveries were zero versus estimates for zero to 20 contracts.
- Oil
deliveries were 2,596 versus estimates for 350-2,500 contracts.Last date
April 23.
- The SK/SN
inverse is widening, trading out to 8 ¼ -11 cents overnight.
Wheat
- The
results from the first day of the annual HRW wheat tour projected an
average yield in northern Kansas at 34.7 BPA versus last year’s tour
estimate of 43.8 BPA for the same area.The 5-year average for this area is
also 43.8 BPA.This is the worst yield since 2001.271 field samples were
taken from an area from Colby to Manhattan, KS.The tour moves into the
south and west today and is expected to see worse yields.
- The
director of the Colorado Assn. of Wheat Growers put their wheat yield at
32.0 BPA and the director in Nebraska pegged their yield from 40 to 45 BPA
(avg. is 41.1 BPA).
- Deliveries:144
CBOT contracts, last date April 8. Estimates for SRW delivery were
zero-400 contracts.There were no HRW deliveries, estimates were for zero
to 100 contracts. Minneapolis deliveries were 453 contracts, last
date April 22.
Grain
Merchandiser
Midwest
Cooperatives
800-658-5535
800-658-3670
605-295-3100
(cell)
605-258-2166
(fax)
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