April 17, 2015 Written by Chris Robinson Corn: May corn settled up 3 ½ cents at $3.79 ¾ New crop CZ15 settled up 2 ½ at $4.02 ¾. For the week, May corn settled up 2 ¾ cents while CZ15 gained ¾ cent. Corn had an uneventful day especially for a Friday as we ended the week near the top of the 10 cent trading range for the week. Producers and speculators alike will focus on Monday’s planting progress report which will be released at 3PM. With farmer’s focused on planting, not much physical grain is moving across the country. New crop CZ15 was able to settle above the psychologically comforting $4.00 level. Absent any surprises in Monday’s export inspections or crop progress we may see trade gravitate towards the May options strike prices which have the largest open interest. We will take a look at those next week as we head into next Friday’s May option expiration. Hedgers: No change in recommendations. Wheat: May wheat settled unchanged at $4.94 ½. KCW settled up 1 cent at $5.09 1/4. MWK ended down 2 ¼ cent at a fresh contract low settlement of $5.32 ¾. For the week, WK dropped 32 cents, KCW dropped 48 ¾ cents and MWK dropped 48 ¼ cents on a settlement basis. The funds hold an estimated short position of 91K contracts. The forecast of lower temps and a possible freeze in the plains next week did little to stem the bearish tide. As for Russia, the trade seems to believe that their export tax will fall by the wayside by the time they meet officially in June. As always, we have to see if they “adjust” that in order to create an artificial spike in prices. Monday we’ll get updated planting progress and condition reports for all classes of wheat. We’ll also see if we can stem the recent tide of marketing year lows for export figures. Bulls continue to search the darkness for a light at the end of the tunnel. 2015 is shaping up to be the year where hope really has not been a good marketing plan. Hedgers: Continue to pull money out of deep in the money puts following our risk/reward parameters. Soybeans: May settled up 2 ¾ cent at $9.68 ¾. New crop SX15 settled unchanged at $9.52 ¾. May beans traded mostly higher through a “narrow” 9 cent trading range. Funds bought 4K contracts, but entered the day short an estimated 48K contracts. For the week, May beans gained 17 ¼ cents while SX15 gained 10 ¼ cent. Was this week the start of a short covering, weather related rally? Considering that last week we saw a 6-month low settlement on the longer-term weekly charts, a bull can only hope that the “lows are finally in”. Monday will give us exports to look at and we’ll see if China is still sitting on its hands as it has for the past weeks. Technically, new crop SX settled in the lower part of its 60 cent wide sideways, directionless trading range, bounded by $10.00 resistance above and $9.40 support below. Hedgers: No change in recommendations. The grains took a back seat not only today, but really for the entire week as we seemed to take a breather after two big USDA reports came March 31st and then the April 9th WASDE report. We don’t get a USDA report again until May 12th when we get a production report and fresh supply and demand numbers. That leaves us the next 3 weeks where the only real meat and potatoes numbers will be every Monday at 3PM with planting progress and condition reports. The spotlight is now on the weather. We’ve just made it through another sideways week of price movement, in a year of sideways price movement. Today the Dow was down over 330 points at one point on increased worries about China, Greece, and US earnings reports. Grain prices may be buffeted by outside price volatility until we get a solid indication of what Mother Nature has in store for the grains growing season. As always, our job is to protect your downside while keeping the upside completely open. We’re always “hopeful” for higher grain prices. We are also realistic about the risks of the unknown, which is why we hedge. 2015 may end up giving us much higher prices if we get a demand story or a weather story. If so, we’ll have the grain to sell at higher prices. If we have a return to our harvest lows in the corn and beans, we will be prepared for that as well. Have a great and safe weekend. CER
