Corn: May corn settled down 6 ¾ cents at $7.26 ¼. CZ settled down 3 ¼ cents at $5.65 ¼. For the week CK gained 9 ¼ cents while CZ gained 3 ½ cents. Corn made its high overnight around 2 AM, slid lower all morning til about 10AM, and then bounced back 7 cents from its lows. Informa released its updated estimate for corn acres at 97.753 million acres. This was 1.547 Million acres less than their January estimate of 99.3 Given the fact that old crop corn had rallied 52 cents between March 7th and Thursday’s 6-week high at 7.34 ½, today’s lower close on profit taking seemed logical. CK has resistance above at 7.47 ½. New crop CZ settled above the 2-1/2 year old trend line on the weekly chart once again. This week’s intersection point comes at 5.56. Thursday’s high in CZ marked a 50% retracement of the 60 cent sell off between the Feb 2nd high at 5.96 ½ and the 9-month low posted on March 7th at 5.38 ½. Hedgers: There are 3 business days left before Thursday’s USDA report. Make sure you are entering this report with a balanced risk management.
Wheat: May wheat settled up 1 cent at $7.29 ¾. WN settled up 1-3/4 cents at $7.29 ¼. For the week, WK gained 6 ¾ cents and WN gained 8 cents. Wheat mirrored corn through the morning until 10AM. Informa estimated wheat acres at 56.074, down slightly from 56.2 estimated in January. The USDA remains at 56.0 million acres. As soon as the number was released, wheat began its 15 cent climb into the close. This is a bullish-hook-reversal on the daily charts. WK had rallied 55 cents between its 9-month low on March 6th down at 6.81 and Thursday’s 1-month high at 7.36 ½. The bullish afternoon action was most likely fueled by corn/wheat and bean/wheat spread repositioning at the end of the week. The Ukraine announced it will be planting 647K hectares which is 20 times greater than last year’s aberration of just 32K hectares. So far, they have enjoyed favorable weather for 2013. Hedgers: There are 3 business days left before Thursday’s USDA report. Make sure you are entering this report with a balanced risk management.
Soybeans: May beans settled down 8 ½ cents at $14.40 ½. SX settled down 11 cents at $12.63 ¾. For the week, SK gained 14 ½ cents and SX gained just 2 ¾ cents. Soybeans posted a high at 6:30 AM and then slid lower until the Informa number at 10AM. After the number it took back about ½ of the day’s losses by the 2PM bell. Informa bean acres came in at 78.457 million acres vs. 78.8 last month. The USDA is currently at 77.5. This number was a big contrast to Lanworth’s estimate yesterday that bean acres would be at 81.3 million acres. The trade awaits Thursday’s USDA acres report for a more definitive number. Lastly, Brazil today announced a change in their tax code which would favor meal and oil exports. This might have impact down the line, but their current infrastructure problems would have to be dealt with first. What difference does it make how many bushels are grown, or how many crush plants are built, if the product can’t get shipped to the rest of the world? Hedgers: Only 3 days left until the USDA report. Make sure your protection is balanced.
This weekend we’ll all be watching March Madness. There is an analogy for basketball which applies to risk management for your business. Our puts are our defense. They are there to block shots and keep you in the game. Conversely, a call is like an offensive rebound. It gives you a chance to take another shot close to the basket and possibly score more points. Good risk management demands that you stay disciplined with your cash sales as well as with your protection. The puts are our protection for our unpriced bushels. The calls are our protection for bushels we have already contracted. On Thursday the 28th, it will be game time. Make sure you are balanced in your preparation for that report. Have a great and safe weekend.