Corn: May Corn settled up ½ cent at $4.79. December settled down 1 ¼ cent at $4.79 ¼.. For the week, CK settled down 7 cents, while CZ settled down 7 ¼ cents. Corn had subdued trade to finish the week, with just a 5 cent trading range. It looked like the trade was more interested in their NCAA brackets then making big changes heading into the weekend. May corn has done some back filling in the wake of the 6-month high at $5.02 ½ posted two weeks ago. Funds remain long an estimated 200K contracts, but we will know more Monday as we look at the COT report. Trade will dial into predictions/guesses/ thoughts on what the USDA will say on the March 31st planting intentions report with fresh supply and demand stats to chew-on . New crop corn is trading near its 6-month high, posted just 2 weeks ago. It’s a great opportunity to protect that rally, while leaving the upside COMPLETELY OPEN.
Wheat: May wheat settled down 10 ½ cents at $6.93 ¼ . July settled down 10 cents at $6.95 ½ . KCN never got the $8.00 print for the week and settled down 10 ¼ cents at $766 ½. For the week , May Chicago wheat gained just 6 cents . After yesterday’s nine month high tick up at $7.23, Chicago wheat saw more profit taking heading into the weekend. How big was the rally from the low posted 1/30/13, just 7 weeks ago? $1.70 for Chicago May wheat. KCK contract rallied $1.94, or 32% from low to high. Fundamentally, the Ukraine issues seem to be calming down, and our grain is once again less competitive on a global scale. Future export business might suffer due to the spike in the US dollar index to a one month high yesterday.
Soybeans: May soybeans settled down 25 cents at $14.08 ¾. November settled down 12 ¼ cents at $11.77 ¼. For the week, SK gained 20 ¾ cents, while SX gained 3 cents. The July/Nov spread had another 20 cent trading range , but settled -15 cents at $2.05. May beans had an 81 cent trading range for the week. Technically, the bears are talking up a potential double top at $14.56 ¼. The contract high price was $14.60. SK enjoyed a $2.00 rally from its January low. We recommended selling cash beans into this rally. After hearing rumors of the “Chinese cancellations” for weeks, we finally got confirmation of these. The next week should focus on the funds, which at last measure were long at least 240K contracts. The commercials have sold these contracts to them over the last two months.
The USDA report is turning into a big game of chicken, with both sides charging at one another full speed over a one-lane bridge. On the 31st, it will be interesting to see who blinks first. Hedgers: We are now at 40% sold of 2014 guaranteed bushels. We have been able to get our put protection at a steep discount on this rally.
The USDA Planting intentions report will also give a handle on fresh stocks and therefore a more definite picture of Supply and demand. Historically, this report has a high probability of LIMIT moves. It also sets key highs and lows which the market pivots around between April and June. Take a look at the attached chart link at the bottom of this paragraph. This gives you a visual of what we are trying to stress as the importance of this number for a hedger.
The real wildcard this year for the USDA is the 9 million of prevent planting acres. The manner in which those acres are accounted for will set the tone for the trade for the next 3-months. That’s a huge flip of the coin for producers and end-users alike. Have a great and safe weekend.
