Corn: May corn settled up 5 ¾ cents at a 3-week high settlement of $5.07. However, this settlement was only ½ cent below its 7-month high settlement, posted on April 1st. December corn settled up 3-1/2 cents at 5.06 ¼, also a fresh 3-week high settlement. This settlement in the December was also just ½ cent below its 7-month high settlement, posted on April 4th. For the week, CK gained 12 ¼ cents while CZ gained 9 ½ cents. This week was notable because we saw corn post 1-month lows on Monday, followed by 3-week highs today as corn explored a 23 cent trading range for the week. Today’s market was dominated by May options expiration and the weather report. Funds bought 5,000 contracts of corn, using the weather as a catalyst to support their existing long bet. Monday we’ll get fresh weather reports as well as an updated planting progress at 3PM CST. Technically, CZ bulls have 5.17 and then $5.25 in their bull’s-eye. Support below comes at $4.87 ½ (Monday’s 1-month low) and then $4.76. Hedgers: Today CZ settled 71 cents higher than its January low down at $4.35. Reward the rally with cash sales to our recommended level of 50% of 2014 guaranteed bushels. Roll up your put protection if possible, and roll up profitable call positions on previously sold bushels where possible. This rally is a marketing opportunity.
Wheat: May wheat settled up 11 ¼ cents at a 1-week high settlement of $7.00 ¼. July wheat settled up 11 ¼ cents at a one week high settlement of $7.08 ¼. For the week, May wheat gained 9 cents while July gained 9 ¼ cents. Bulls and wheat farmers with unpriced grain can once again thank Vladimir Putin for the knee jerk rally in wheat prices. It looked like the trade of the day for a lot of speculators was to buy wheat prior to the weekend as a hedge against the Ukrainian issue escalating into something worse. Tuesday we had a low at $6.62 in May wheat, followed by a high today at $7.01 ¾. Those 40 cents a bushel translates to $2,000.00 for every 5,000 bushel contract of wheat. That’s an opportunity we want to seize as marketers. Hedgers: Roll up put protection where possible following our rules of engagement. Make sure you are taking profits from call options in place for previously sold bushels as well. Finally, use this bounce to get to our recommended level of 60% sold on guaranteed 2014 bushels.
Soybeans: May soybeans settled up 26 cents at $14.98. November beans settled up 8 ¾ at $12.39 ¾ which is a new 9-month high settlement. For the week, SK lost 16 cents, while SX gained just ½ cent. The week was volatile, to say the least, with SX posting a 3 week low on Tuesday down at $12.08 ½ , this on the heels of Monday’s high at $12.43 ½. Today China announced it will delay a planned auction of at least 3MMT of 2009 and 2010 beans held in strategic reserve. That bit of news, along with May options expiration sent the bears running for cover as SK had a 28 cent trading range today. Currently there are also at least 6 cargoes of beans offered for re-export, with a rumored dozen more having problems with letters of credit. Logic would suggest that once these beans hit the US gulf that should ease demand here. Yet, in the face of those fundamentals, SK traded to $15.00 here today. The funds remain enamored with grain, defending their massive long bet on every major dip we’ve seen so far. If that were to ever change, we would be set up for an “up the escalator-down the elevator shaft” type of blow off move in beans. For now, however, the funds are long, very profitable and happily defending their investment on every dip lowers. Hedgers: Take advantage of the 9-month high settlement in SX to get to 50% sold on guaranteed 2014 bushels. Roll up put protection where possible as well as taking profits on existing calls in place for previously sold bushels.
With CZ ½ cent away from its 7-month high settlement and SX posting a new 9-month high settlement, these are prices to be thankful for as producers. You can thank the investment community, who has decided to make a large long bet on grains this year. Like the weather, investor psychology can change very quickly. The stock market is near record highs, despite today’s 110 pt. loss. The Dow is still within 250 points of its record high tick posted 3 weeks ago. Gold is stubbornly trading around the $1300.00 an ounce level. June Crude Oil is trading right at the key level which gets media attention, $100.00 dollars a barrel. Manage your risk, leave the upside open, and hope that the investment community remains supportive of commodities. If the winds of Wall St. were to change, the Emergency Exit Doors might get awfully tiny. Now is the time to go to the store and get your own escape ladder or parachute for safe keeping. That’s what risk management is all about.
Have a great and safe weekend!
CER