Sep 20, 2014
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The Grain Report

RSS By: Sean Lusk,

Market updates from Walsh Trading.

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. 

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