Sep 1, 2014
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March 2014 Archive for The Grain Report

RSS By: Sean Lusk, AgWeb.com

Market updates from Walsh Trading.

Tim Hannagan's Weekly Grain Report for March 28, 2014

Mar 28, 2014

 This is Tim Hannagan it’s Friday, March 28th.  April is next!  Since index and trend following funds took over as the big volume traders controlling prices they developed a seasonal pattern for their havoc.  The first three months of the year they price in all the news affecting prices in South America, mainly Brazil and Argentina.  They are among the largest corn and bean producer exporters in the world. April is the between month before they begin to trade the planting and growing season in the U.S. They use April to clean books up and trim the fat of first-quarter buying.  Last April 2013, corn broke 65 cents, wheat 75 cents, and beans $1.00.  The year prior 2012, corn broke 70¢, beans 50 and wheat 70.  Each year going backwards has its own correction variable but its clear funds like to step back in April to get a running start for the summer growing season uncertainty.  The importance of an April break, should it occur, is it is your next chance to get long for the summer rally.  The April low shouldn’t last long as a rally into late May seems possible as late planting seems certain.  A record cold winter has the Midwest soil frozen deeper than normal.  We need soil to be over 58° before we seed.  WXRISK.COM the AG weather site sees April as colder and wetter than normal, so that goal will be difficult.  Before the April break sets in we have to get past Monday’s 11 PM central time USDA planted acres report and quarterly stocks report. On report day the funds trade the stocks on hand report first as its numbers are permanent. If they find 400 million bushel of corn or 50 m.b. fewer beans it comes off or is added on to ending stocks.  It does not change later. The acres report and yields prospects change and those are based on weather. Weather validates the acres. If you plant 2 million less acres but have record yields you produce more than the year prior with more acres. The day after the planted acres report and traders say, it’s not what you plant, but what you grow.  Its importance is that it sets the bar going forward and we therefore have a starting point for potential production. Technical’s read like this support on May beans 13.85, resistance 14.55.  May corn support at 4.78, resistance 4.94 then 5.14.  May wheat support is 6.90 with resistance 7.22.

For those interested in grains, I host a free grain webinar each Thursday at 3:00 PM central time. Link for next week’s webinar is below. If you cannot attend live, a recording will be sent to your email upon signup. Or please contact me at anytime at 888 391 7894 or thannagan@walshtrading.com

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Walsh Trading, Inc. is registered as an Independent Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. ("WTI") shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.


 

Tim Hannagan's Weekly Grain Report for March 21, 2014

Mar 21, 2014

 This is Tim Hannagan it’s Friday, March 21st.  It took a $1.60 rally in wheat to get funds to cover their near record short position of 90 thousand contracts to now being long.  They covered their shorts on fear on several issues. Talk of continued drought in the western plains wheat states and potential shipping problems from monster world wheat shipper the Ukraine.  Getting out of shorts on fear is over for the funds and to build a long position it will take adverse weather to ignite a rally. We know demand is weak and not a driving source. The short covering rally was all about supply side fundamentals.  Crop condition reports this week lowered crop ratings in Texas, Colorado, Oklahoma, and Kansas, all key winter wheat states. As weather goes in these states, so goes the prices.  The common thinking is late March and April will continue to be dry.  Next week looks dry but concern is over the cold temperatures.  The central plains could see temperatures at night in the teens.  In conclusion, the short covering rally is over.  Trade the weather reports as they relate to early emergence and wheat condition.

 Corn is consolidating ahead of the March 31st planting intentions report.  Though demand has been good we have seen a slow down the last two weeks as China has been buying corn from the Ukraine. China this year reached an agreement with the Ukraine to purchase a specific tonnage of corn.  Recent problems over the Russian invasion appear to have China rushing in to buy corn in case predetermined agreements change. This looks to keep the corn under 4.94 before the March 31 report.  But 4.70 support would hold as well with talk of the report to show 2 to 6 million acres less corn will be planted.  Technical’s read like this.  Support on May wheat lies at 6.90 then 6.80, resistance 7.22.  May corn support 4.70, resistance 4.94.  A bullish March 31 report and they will push to 5.14.  May soybean support 13.80 then 13.50, resistance 14.50.  Don’t forget to attend my free grain webinar each Thursday at 3:00 PM central time. Link for next week’s signup is below. If you cannot attend live a recording will be sent to your email upon signup. Or please contact me at anytime at 888 391 7894 or thannagan@walshtrading.com

 

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Tim Hannagan's Weekly Grain Report for March 14, 2014

Mar 14, 2014

 This is Tim Hannagan it's Friday, March 14th. Last week we prepared you for a sell -off in soybeans after the Monday March 10th USDA crop report release. I based it off the eroding weekly export inspection shipments and the March seasonal selloff of declining March weekly export sales. As you know soybeans dropped from report day high of 14.55 to a 13.65 low Wednesday. Our projection was that we were looking for a pull back to 13.50. This week saw the demand numbers continue to support a further correction. Monday’s inspection report, though higher than the week prior, had China only in for a total purchase of 25 million bushels of soybeans, the second lowest in five months. Thursday's weekly export sales report showed 113 thousand metric tons were sold last week for future shipment.  Zero to China for the first time in more than three months. A year ago the report showed 392 thousand metric tons sold. We also said don't expect China to start cancelling large tonnage of previous purchases of beans yet delivered. But rather to look for China to switch from current crop year delivery dates to new crop year delivery after September 1. They have done this the last two years. Thursday's weekly export sales report showed 559 thousand metric tons for new crop year delivery after September 1st going to China. By switching old crop year delivery dates too new crop year, we can see old crop year ending stocks increase and new crop decline. New crop year numbers have no measurable effect on old crop futures when initially released. Because soybean stocks are so tight any fresh new bullish news and beans can rally sharply. But should slowing demand continue we look for a test of 13.50, then 13.25 basis May futures. We may not take out 13.50 prior to the March 31st planting acreage report which is expected to be bearish and show 2 to 4 million more acres of beans to be planted. Expect firmness just ahead of the report on fear, due to the possibility of the report does not show a big increase in acreage but a small one at only 1 to2 million acres.   Entering today, Friday, May bean support is 13.50 then 13.25 with resistance 14.10 then 14.55. 

If you haven't yet, please sign up for a recording or to attend live one of my free weekly grain webinar discussions each Thursday at 3 PM central time. I spent an hour covering every aspect of the grain market which covers supply, demand, charts, and weather. Signup is free, please go to Sign Up Now or call me toll free at 888 391 7894  to sign up. 

Tim Hannagan's Weekly Grain Report for March 7, 2014

Mar 07, 2014

 This is Tim Hannagan it's Friday, March 7th. With the beans rallying over two dollars the last five weeks, everyone wants to know when a measurable correction will occur. There are some suggestions it's near. We spent February and early March pricing in poor growing and harvest weather in South America and problems with the Ukraine threatening grain shipments. Brazil is the largest producer exporter of beans. Argentina is the third largest producer exporter. The Ukraine is the third largest corn shipper and sixth largest for wheat. Needless to say problems there means higher prices here. Here are a few ideas that might help your trading while controlling risk. Demand for U.S. beans may have begun to erode. Monday at 10 AM central time our weekly inspection report showed 36 million bushels were inspected to be shipped to importers versus the two prior weeks of 54 and 57. Of the 36 million bushels shipped China was in for 18 million bushels versus the two weeks prior at 39 million and 47 million.  Last March shipments collapsed as the South American crop came online, leaving the U.S. no longer the primary port of origin for beans. Last March 4th we inspected and shipped 40.2 million bushels, with China in for 25 of the total. Last March 11th, the U.S. shipped 17 million with China in for just 2.7. On March 18th we shipped 9 million with China in for five million of the total, and lastly March 25th of last year saw the U. S. shipping 18 million and China in for 6 million of that total. Last March export sales for future shipment also collapsed. On February 28th 2013 we exported for future shipment 684 thousand metric tons. On March 7th exports were 392 million. On March 14th, 66 million. March 21st, 107 million and March 28th, 66 million. April was bearish on shipments and export sales as well.

 Now, at 11 AM central time Monday our monthly USDA crop report is released. Traders fear it to show a sharp drop in bean ending stocks. Once the report is priced in we could see a seasonal break as the March 10 report is the last bullish report for beans before we plant and weather becomes the driving force. On March 31st the planting intention report is expected to come in showing 2 to 4 million more acres planted for beans and 2 to 4 less for corn due to the high prices of soybeans.  If the March 10 report is bullish were set up for a weak close or key reversal on the charts. May bean resistance is 14.79 then 15.25 with support 14.50 then 14.00. May corn resistance is at 4.94 then 5.14, with support at 4.82. May wheat resistance 6.80 with support 6.48

For those interested I hold a weekly grain webinar series every Thursday at 3pm central time talking covering everything that is pertinent to the grain market. Registration is free and if you cannot attend live, a recording will be sent to your email upon signup. Link for registration is below.

Register Now

 

 

 

RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING.  THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT.  WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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