The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Walsh Trading Commercial Hedging Service is dedicated to providing timely, relevant and quality information. Tim Hannagan, our Senior Grain Analyst provides a weekly Grain Report. Tim has been ranked the #1 grain analyst in the United States per Reuters and Bloomberg for his most accurate price predictions for soybeans and corn in the years 2011 and 2012. Additionally, Mike Bauer, our Senior Livestock Analyst and Ben DiCostanzo, our Senior Technical Analyst provide frequent insights into the Livestock market. Finally, Sean Lusk and John Weyer, Co-Directors of Walsh Commercial Hedging Services provide a variety of insights into the Grain markets.
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 firstname.lastname@example.org
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