Corn: May corn settled up 1 cent at $4.86. December settled up 3 ¼ at $4.87 ¼. For the week, May lost 3 cents while December gained 2 ½ cents. The trade was lighter than usual, and a typical for a Friday on a Holiday-type weekend. Last Friday’s high print at $5.02 ½ punctuated a 2-month, 88 cent rally which saw May gain 20% in value from its January 10th 3-1/2 year low. The market seemed to take a breather here after that high tick. Most of the focus was on uncertainty in the Ukraine, which has both bulls and bears placing their bets prior to the weekend. There were reports on the wires that corn was moving to Algerian and Morocco from Argentina. Technically, Old crop CK has resistance at $5.02, $5.12 and then $5.27 ½, which is the 8- month old high posted the last week in August. Support for May comes at $4.73, $4.69 and then $4.58. Hedgers: No Change in recommendations.
Wheat: May wheat settled up 13 ½ cents at $6.87 ¼. July week settled up 12 ¼ cents at $6.90 ¼. For the week, May gained 33 ¼ cents and July gained 31 ¼ cents. This pencils out to a 5% gain in value for the week. New crop wheat has picked up $1.30 in the past 6 weeks (+23%). In this environment, it is imperative to stay balanced with your hedging. Monday we will be looking closely to see the open interest changes as well as the COT report, which will show if the funds remain net short. Focus remained on the Ukraine and all of the rumors surrounding it. Suffice it to say that the markets do not like geo-political uncertainty. Last reports still had zero reports of any issues shipping grain in the Black Sea area. If grain were to stop flowing freely there, the markets would undoubtedly see rapid and violent “price re-discovery”. Hedgers: We took advantage of this rally to roll up puts for a 4:1 better risk/reward ratio. In most cases, these were puts that we had taken profits out of during the earlier sell-off.
Soybeans: May soybeans settled down 7 ¾ at $13.88 ½. November settled down 5 ¼ at $11.74 ½. For the week, May lost 69 ¼ cents, while November lost 22 ¾. The markets continue to focus on anticipated cancellations of previous sales to China, with the average analyst guess between 1 to 3 million metric tons. Europe has stepped up and been looking at US beans due to high meal offers in Argentina and delays in loading meal from Brazil. On Monday we will get fresh NOPA February crush. The all-important COT report will be analyzed and we will see if the funds maintained their massive long position after this week’s action. The much-talked-about July-Nov spread took it on the chin this week, coming in 40 cents on the week. Bull spreaders had pushed the spread from a low of $1.15 in January to it high a week ago at $2.37 ½. After a $1.22 stretch of the rubber band, we saw a 33% drop this week with a settle at $1.97. Support in the May contract comes at $13.65 and then $13.55. Resistance above lies at $14.10 and the $14.50. Hedgers: No change in recommendations.
As we head into St. Patrick’s day weekend, one has to wonder if the grain markets will continue to enjoy what, since the January 10th USDA number, can only be considered “good luck” for the bulls. Indeed, just about all the markets so far in 2014 have been run over by the bulls, despite a wall of worrisome issues out there.
November beans have rebounded from 2 year lows posted just 6 weeks, ago. Old crop corn rallied back from 40 month lows to climb back and pierce the $5.00 level after posting its low on the day of that report. Wheat has finally stopped the endless bleeding which started 16 months ago when May wheat posted a high tick at $8.98, only to slide to its contract low at $5.53 just 6 weeks ago.
My point is, as farmers and producers, so far in 2014, despite a lot of very negative talk and predictions by a lot of analysts even the USDA, we’ve had a nice bounce here in prices. We can only hope that the luck we have enjoyed the past 2 months holds through the rest of 2014. Of course, the key verb there is “hope”. We have just 10 business days left in front of that USDA report. Historically this has been a doozy of a report, which sets the tone for prices for at least the next 4 months. Please take advantage of this report and get up to speed with your marketing before the 31st.