Tim Hannagan's Weekly Grain Report for April 25
Apr 25, 2014
This is Tim Hannagan it's Friday, April 25th. Wheat is worried about weather on the emerging wheat crops and corns weather concerns are over wet conditions delaying fieldwork and planting delays, beans don't worry about weather until May as beans are planted last. This leaves demand next week still a pricing source. Demand for soybeans has slowed appreciably. We've gone from exporting 354 thousand metric tons weekly, 5 to 8 weeks ago, to 43 thousand metric tons the last four weeks. Thursday's weekly export sales report showed 800 metric tons sold for future shipment, a marketing year low. Seasonally exports will further erode in May. After May 1st trend and index following funds refocus away from demand to weather and its effects on planting. Traders will use weather to determine if excess rain and corn planting delays will lead to more or less beans going to seed. When you consider the price of beans versus corn, it would be a very easy decision to switch corn acres over to beans. Every year this discussion on switching arises but never really occurs. This year is different as the price comparison is huge. With a wet week ahead for the Midwest slowing and stopping fieldwork and planting we should look for beans to have a bearish reaction after initially opening up higher. Sell any weather strength Sunday into Monday. Look for selling into Wednesday.
Wheat’s late week’s strength came on two issues. One, the weekend could be confrontational between Russia and the Ukraine. Secondly potential for snow in the Dakotas and Kansas affecting winter wheat emergence in Kansas and spring wheat planting in the Dakotas. This should be priced in Sunday into Monday making for a good sell and look for late month end profit-taking into Wednesday. As for corn, if we enter Sunday's trade and traders see the rain projected with areas of 3 to 6 inches called for, look for higher prices, possibly 5.14 basis May. Sell it and look for month-end profit-taking. May corn support is 5.00 resistance 5.14. May bean support is 14.55 resistance 15.40. May wheat support 6.92 then 6.70 resistance is 7.04 then 7.22.
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Senior Grain Analyst, Walsh Trading
312-957-8108 or 888.391.7894
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