Apr 19, 2014
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The Grain Report

RSS By: Sean Lusk, AgWeb.com

This is Tim Hannagan it's Friday, April 11. Our first crop condition report of the year for wheat came out this week and will come out each Monday at 3 PM central time. This report is leaned on heavily by large traders to determine whether the crop is getting better or worse on yields. This first report showed 35% of the crops in the Western wheat states are in good to excellent condition, down 1% from 36% a year ago. A good crop rating is  65%. When this crop went dormant the last crop condition report November 24, 2013 showed 62% in good to excellent condition. The 27 percentage point drop was the largest ever over a winter period and the worst for this time of year in the last 12 years. Two main reasons were the drought and the polar vortex. This winter subzero temperatures were consistent and often and caused a lot of stress and winter kill in the young wheat seedlings lying dormant. Key states to follow are number one wheat producing state Kansas, then Texas, Nebraska, and Colorado. The key to trading now is to follow one weather report at a time one week at a time. The current forecast by WXRISK.com the AG weather site sees rain falling on the eastern side of those major states we just noted. Should this system track farther east over the weekend taking the rain out of the western wheat belt, look for a higher open Sunday night but should the system hold as projected, followed by another rain system, with even more rain called for the following Thursday and Friday we should expect May wheat to break 6.52 support and test 6.44 major support before short covering or profit-taking starts. This first-rain system begins Saturday, Sunday, and Monday and then a second system starting next Thursday and Friday. Although the rain is bearish for wheat, it's brings light support to corn, as  the rain being forecast across the Midwest and the cold temperatures, look to delay fieldwork being done in the Midwest and planting being done in the southern Delta. We don't expect a big corn rally off the forecast but we do expect corn to hold its support at 4.94. Beans of course are planted later so it’s  not as concerned about planting delays at this point but more concerned about the softening demand with Brazil  noting that China has canceled more beans shipments which may be re-purchased by the US to make up for some of our shortfall on ending stocks. Technical’s read like this. May wheat resistance is 6.68 then 680 with support at 6.52 and 6.44. May soybean support is 14.55 then 14.20 with resistance at 15.15. May corn resistance is 5.14 support 4.94 then 4.88.

For those interested I hold a weekly grain webinar each Thursday at 3pm. I cover everything related and pertinent to the grain market in detail. It is free for anyone who wants to sign up and link for sign up is below. If you cannot attend live a recording will be sent to your email upon signup.

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Tim Hannagan's Weekly Grain Report

Feb 07, 2014

This is Tim Hannagan it is February 7th. The weekly export inspection report came out Monday at 10 AM central time. Beans inspected and loaded on ships were 45.4 million bushels, down from 73.9 the week prior and four-week average of 61. China was in for 30 million bushels of the total versus 47 million bushels last week thus making their second lowest import in three months. We expected lower business as China's in their lunar holiday this week as well as soybeans are being bought in Brazil now at one dollar under U.S. posted prices. Our export business is still good, just no longer great. It should continue to erode into month end. Weekly inspections last February averaged 37 million bushels, March 21 million bushels and April only 10 million.

 Corn inspections were 21.6 million bushels down from 29 million last week. Wheat inspections were 11.6 million bushels versus 14.6 the week prior. Both corn and wheat are showing weak demand near-term. Thursday's weekly export sales report showed 577 thousand metric tons of beans were sold last week for future shipment. China was in for 436 of the total versus the two prior weeks of 251 and 259. China was overbooking ahead of this week's lunar holiday closings. Last February the average was 341 weekly and March 305. With soybeans selling one dollar lower in Brazil and harvest underway we have to assume the seasonal correction is near. Additionally, we saw decreases or cancellations of 530 t.m.t. thought to be China.

 We have our USDA monthly crop report out Monday at 11 AM central time.  The last five reports we broke down after the report as funds took profits and pay bonuses on profits taken. Should the heat dome threatening crops in Brazil said to be coming to an end late next week, coupled with the fact if we come in Monday and  get a neutral soybean report with unchanged on ending stocks, March beans could pull back to 12.60. Yet, a 5 million bushel or more cut in ending stocks and talk of a heat dome extending, we will test 13.75 or higher quickly. Since the crop report is late in the market trading day there's time to get the latest weather updates ahead of the report’s release. If we don't get any bullish surprises for grains Monday, we can expect prices to correct. Support on March corn is 4.40 then 4.20 with resistance 4.50 then 4.60. Support on March wheat 5.56, 5.50 resistance 5.96. Support on March beans 13.20, 13.00, 12.60 resistance 13.40 then 13.75.

To view a recording of my weekly webinar held Thursday February 6, 2014 click obn the following link: View Recording

 

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