Corn: May corn settled up ½ cent at $7.17. CZ settled up 2 ½ cents at $5.61 ¾. For the week, old crop CK gained 17 cents while new crop CZ gained 13 ½ cents. May opened unchanged, quickly spiked down to an early morning low and then rebounded on relatively uneventful Friday trade. New crop corn rallied to its highest price in 3 weeks and led the afternoon rally. This looked like short covering at the end of the week combined with unwinding of some old crop/new crop spreads. No major news today. Some stories early had the bulls touting “colder than average sub-soil temperatures” as possibly creating a planting delay. That might have some validity if it was April 15th, but its only March 15th. That being said, this is the time of year bulls start pulling out all stops trying to talk-up anything that might delay planting. What makes more sense to me is that we are 8 trading days away from the USDA and the majority of US farmers have not sold a bushel of 2013 corn yet. Traders who sold corn in the hole down at the 8-month low of $5.38 ½ just took at 23 cent punch to the gut. Their short covering has no doubt been responsible for the bounce. CZ has major resistance at 5.68/5.70. CK has support at 7.00 and resistance at 7.37 ½. Hedgers: We are 8 trading days away from the USDA. Procrastination is not your ally at this point in time. .
Wheat: May wheat settled down 1 ¾ cents at $7.23. July wheat settled up 1-1/2 cents at $7.21 ¼. For the week old crop gained 26 cents while new crop gained 22 ½ cents. Today’s trade was choppy and two sided, but the wheat came back strong every time they tried to take it to the woodshed. The export figures we saw this week were just too impressive to keep the lid on this market. What’s doubly impressive is the fact that our wheat is still more expensive than many other sources in the world, most notably India and Russia. US wheat is ready and available and can actually be shipped if a customer wants it ASAP. The same can’t be said for other parts of the world where beurocrats and laborers can hold those cash markets at bay. While US farmers stomached over a $2.50 cent haircut over the last 4 months, it seems that our higher quality and relatively lower prices has caught eye of countries that need wheat. WK has support at $7.00 and $ 6.81 (the 8-month low posted on March 6th and 7th.) WK has resistance at $7.52 and then $7.75. WN new crop has support at $7.00 and its 8-month low at 6.87 ½. Hedgers: No change in recommendations. We are 8-days away from the USDA. Make sure you are balanced going into this report. The WK 730 calls we recommended at 16 are now trading at 24. Good risk management is about avoiding speculation and maintaining balanced protection on ALL your bushels, priced and un-priced.
Soybeans: SK settled down9 ½ cents at $14.26. November settled up 1-1/4 cent at $12.61. For the week old crop lost 45 cents while new crop lost only 7 ½ cents. May opened lower and was pressured all day. One analyst noted that there were issues with Chinese purchases in Brazil being canceled, or re-offered back for sale. The inability to deliver grain on previous purchases has put a squeeze on any new financing of continued purchases. In a nutshell, buyers can’t get credit to complete purchases because the physical grain is not getting back to China to pay down previous lines of credit. Support for old crop SK comes at $14.20 and then $14.00. Resistance above for SK is at $14.55 and the $14.85. New crop has support at $12.50, $12.25 and then $12.00. Hedgers: No change in recommendations. The USDA report is in 8 trading days. Make sure your protection is balanced.
The outside markets were impressive as the stock market rallied to new highs once again. Not only the Dow jones, which is considered “narrow” because its only made up of 30 stocks, but more importantly the broader S&P 500 made new highs today. Bears would argue, “It doesn’t make sense”. The US dollar is at 8 month highs. Low and behold, we are trading near 8-month lows in corn and wheat, and 7-month lows in beans. Cotton traded to an 11-month high as it looks like it may be trying to buy acres from the beans. To throw a monkey wrench into the whole picture, we have a credit issue with grain traders out of China. This credit issue may force cancellation of previous purchases. The delays to ship beans out of Brazil (at last check, over 70 days!!) are responsible for this problem.
One has to wonder if this could possibly snowball into something no one ever “saw coming”. Time will tell if this will be some sort of new “black swan” event that rattles markets. Good risk management is about keeping your opinions in check and taking care of business. Protect your bottom line. Hope for the best. That way when the unexpected pops up, you are still in good shape financially. Have a great and safe weekend.