|
Price |
Change |
|
| U.S. Dollar |
82.85 |
+0.44 |
| Crude Oil |
87.89 |
-3.40 |
| Dow |
14,543 |
-322 |
Soybean prices are mixed while corn, cotton, and wheat prices are down for the week. The Dow before closing is headed toward giving back all the gains plus some from the previous week. This on what has been a trying week in the U.S. with the bomb at the Boston Marathon and the explosion at the fertilizer plant in Texas. These tragic events are part of the non ag influences that happen from time to time and are difficult to measure their effects on the markets. Affecting the markets early in the week was a report that China’s Gross Domestic Product (GDP) grew at a rate of 7.7% which was lower than the expected 8%. Overall, the market reaction was that maybe China would import fewer commodities. Still, a 7.7% growth rate is a pretty good clip and not one that implies a drastic slowdown is imminent. Also negatively affecting the market has been investors getting out of $2.7 billion in commodity and precious metals funds this week. Funds will have to be back in the markets to sustain any rallies.
Corn:
Nearby:
| Corn |
Price |
Change |
| May |
$6.52 |
+$0.06½ |
| Support |
$6.39 |
-$0.09 |
| Resistance |
$6.59 |
-$0.06 |
| Technical |
Strong Sell |
= |
| 20 Day MA |
$6.65 |
-$0.19 |
| 50 Day MA |
$6.89 |
-$0.08 |
| 100 Day MA |
$7.06 |
-$0.05 |
Weekly exports were within expectations with net sales of 16.4 million bushels (net sales of 15.8 million bushels for the 2012/13 marketing year and 665,000 bushels of net sales for the 2013/14 year). Ethanol production dropped 22,000 barrels per day to 832,000 barrels per day in the latest report.
New crop:
| Corn |
Price |
Change |
| September |
$5.72 |
-$0.05 |
| Support |
$5.59 |
-$0.02 |
| Resistance |
$5.80 |
-$0.05 |
| Technical |
Sell |
= |
| 20 Day MA |
$5.70 |
-$0.06 |
| 50 Day MA |
$5.77 |
-$0.04 |
| 100 Day MA |
$6.02 |
-$0.04 |
Corn planted as of April 14 was reported at 2% compared to 16% last year and the five year average of 7%. The trade was expecting 4% – 6% planted. It is expected that planting progressed some during the week, but still behind the average. It is not yet gotten to the point for the bulk of the intended corn acres to say that a large percentage of corn ground will be switched to soybeans. However, that possibility or the perception that less corn acres could give some support to the market. I would be at least 20% priced. From a price risk management standpoint, a $5.80 September Put Option costing 44 cents would set a $5.36 futures floor.
Cotton:
Nearby:
| Cotton |
Price(cents) |
Change |
| May |
83.48 |
-2.10 |
| Support |
83.49 |
-1.16 |
| Resistance |
85.43 |
-1.42 |
| Technical |
Sell |
= |
| 20 Day MA |
86.21 |
1.64 |
| 50 Day MA |
85.96 |
+0.10 |
| 100 Day MA |
81.63 |
+0.54 |
| AWP |
71.32 |
-0.13 |
All cotton weekly export net sales were 262,200 bales (211,200 bales of Upland cotton net sales for 2012/13; net sales of 36,000 bales of Upland cotton for 2013/14; and net sales of 15,000 bales of Pima cotton for 2012/13. Prices have been dealing with uncertainties on the release of cotton stocks from India and China.
New crop:
| Cotton |
Price(cents) |
Change |
| December |
85.17 |
-1.17 |
| Support |
84.39 |
+0.48 |
| Resistance |
86.49 |
-1.38 |
| Technical |
Buy |
= |
| 20 Day MA |
86.41 |
-0.75 |
| 50 Day MA |
85.72 |
+0.36 |
| 100 Day MA |
82.29 |
+0.44 |
Cotton planted was reported at 8% this week compared to 5% last week, 13% last year and the five year average of 10%. There has been some indication or maybe speculation that there could be as much as 1 million more acres of cotton planted than intended in the USDA March 28 report. That could add resistance to any rallies. Implementing a floor price strategy would entail buying an 86 cent put option costing 5.45 cents and setting an 80.55 cent futures floor. Cotton equities on 2013 loan cotton are in the 26 cent range.
Soybeans:
Nearby:
| Soybeans |
Price |
Change |
| May |
$14.28 ¼ |
+$0.15 ¼ |
| Support |
$14.11 |
+$0.20 |
| Resistance |
$14.49 |
+$0.19 |
| Technical |
Buy |
+ |
| 20 Day MA |
$14.08 |
-$0.01 |
| 50 Day MA |
$14.29 |
-$0.07 |
| 100 Day MA |
$14.27 |
+$0.03 |
Weekly exports were within expectations with net sales of 20.8 million bushels (net sales of 12.5 million bushels for 2012/13 and net sales of 8.3 million bushels for 2013/14). Soybean crush for March as reported by the National Oilseed Processors Association (NOPA) was at 137.08 million bushels, less than the 140 million bushels expected by the trade.
New crop:
| Soybeans |
Price |
Change |
| November |
$12.13 |
-$0.18 ¾ |
| Support |
$12.01 |
-$0.18 |
| Resistance |
$12.34 |
-$0.06 |
| Technical |
Strong Sell |
= |
| 20 Day MA |
$12.39 |
-$0.12 |
| 50 Day MA |
$12.58 |
-$0.12 |
| 100 Day MA |
$12.83 |
-$0.03 |
I would have up to 10% priced on 2013 production. I think there may be an opportunity for additional pricing at higher levels or an opportunity to put in place an option strategy. Currently, a $12.20 Put Option would cost 77 cents and set an $11.43 futures floor.
Wheat:
Nearby:
| Wheat |
Price |
Change |
| May |
$7.09 |
-$0.05 ¾ |
| Support |
$6.92 |
= |
| Resistance |
$7.20 |
-$0.07 |
| Technical |
Sell |
= |
| 20 Day MA |
$7.04 |
-$0.06 |
| 50 Day MA |
$7.15 |
-$0.07 |
| 100 Day MA |
$7.61 |
-$0.08 |
Weekly exports were well above expectations at net sales of 61.5 million bushels (20.3 million bushels for 2012/13 and net sales of 41.2 million bushels for 2013/14). China was a big buyer of new crop wheat at 30.9 million bushels.
New Crop:
| Wheat |
Price |
Change |
| July |
$7.11 ½ |
-$0.08 |
| Support |
$6.94 |
-$0.04 |
| Resistance |
$7.22 |
-$0.09 |
| Technical |
Sell |
= |
| 20 Day MA |
$7.08 |
-$0.04 |
| 50 Day MA |
$7.18 |
-$0.07 |
| 100 Day MA |
$7.64 |
-$0.07 |
Nationwide, winter wheat heading was reported at 4% compared to 28% last year and the five year average of 12%. Crop condition ratings for winter wheat as of April 14 were 36% good to excellent compared to 36% last week and 64% last year. Poor to very poor ratings were 31% compared to 30% last week and 11% last year. There has been some concern that recent cold weather has caused some freeze damage. Crop condition ratings over the next few weeks should reflect whether any actual damage has occurred. If it has this would be supportive to the wheat market. Spring wheat planting is at 6% compared to 33% last year and the five year average of 13%. There is still a lot of uncertainty in this year’s wheat production that will become known as we get further into spring. I am currently priced 10% on the 2013 crop. A $7.15 Put Option would cost 34 cents and set a $6.81 futures floor.
