Sep 16, 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 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.

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