If you would like to receive our technical comments including price projections and cycle analysis for important tops and bottoms, click on the link at the bottom of the commentary to sign up for a 30-day free trial subscription.
Follow Ag Watch Market Advisors on Facebook and Twitter for timely information not posted in our commentaries.
After 167 years, we are looking at the end of an era–pit trading at the CBOT. Gone are the days when the insanity behind the hand waving and screaming by traders actually made sense. With the exception of options, grain trading is now computerized. Moving along, corn futures were strong last week from the trend following funds shedding 740 MB from their short position reducing it to a token 45 MB. Prices stumbled briefly early this week from the crop ratings improving one point to 69 percent in good-to-excellent condition. Expectations were for a 1-2 point drop. A year ago, 75 percent of the crop was in the good-to-excellent category. According to Ag Watch’s yield model, the national yield is 163.1 bpa. Export inspections were mundane last week at 33.0 MB, well below the average of 47.1 MB needed to reach USDA’s projection of 1.825 BB.
Soybeans hit a speed bump early this week from concerns of the stock slide in China, and economic turmoil in Greece. Since mid June, stocks in China have fallen over 30 percent. Meanwhile, the rating for soybeans remained unchanged at 69 percent of the crop in good-to-excellent condition. Traders were looking for a 1-2 point decline. Last year, the ratings stood at 72 percent in the good-to-excellent category. According to Ag Watch’s yield model, the national yield is 46.0 bpa compared to 47.8 bpa a year ago. Although planting is essentially done, Missouri is running 24 percent behind their average at 73 percent. This implies that 1.3 million acres of soybeans could go unplanted. Last week, the trend following funds were active as they added 250 MB to their long position increasing it to 350 MB. As the old saying goes, a bull market needs to be fed meaning additional input is needed to push prices to fresh highs. Export inspections were routine at 7.2 MB, and are running ahead of the pace needed to reach USDA’s target of 1.810 BB.
The rally in wheat is losing momentum, as it appears that the dollar is beginning its next leg higher. Be advised that U.S. wheat is already priced higher than our competitors in the world market. This is reflected in exports, as inspections last week were 13.5 MB. We need to ship 18.4 MB on a weekly basis to reach USDA’s projection of 925 MB. At the current rate, we are on track to ship 645 MB. Harvest is creeping along at 55 percent complete versus 38 percent a week ago and 59 percent for the average. Because of wet conditions, Ohio, Indiana, and Missouri are running 24 percent, 21 percent, and 20 percent behind their average. Meanwhile, the ratings for spring wheat slipped 2 notches to 70 percent of the crop in good-to-excellent condition. Last week, the trend following funds dumped 280 MB reducing it to 115 MB.
Want the kind of intel that helps serious producers succeed? Sign up for a FREE! trial subscription to our daily newsletters. ]
Comments and suggestions are provided for information purposes only. Information contained herein is obtained from sources believed to be reliable but not guaranteed to its accuracy or completeness. Readers using the information contained herein are responsible for their own actions. No presentations can be made that recommendations will be profitable or that they will not result in losses. This information is neither an offer to sell nor solicitation to buy of the commodity futures mentioned herein. The writer may be trading in the commodities mentioned.