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The Hueber Report

RSS By: Dan Hueber

The Hueber Report is a grain marketing advisory service and brokerage firm that places the highest importance on risk management and profitable farming.

Morning Comments - Looks like Christmas Morning Should

Apr 15, 2014

www.thehueberreport.com

It is April 15th and here in Northern Illinois and points north we have been given a fresh coating of white fluffy snow.  While that can be exciting to see around the 24th of December, it is certainly not a welcome site when planters should be rolling in the field.  It also seems like a cruel joke on those who have not filed their 2013 taxes yet.  Anyone who maintained it would be a cold day in hell before they got those in have no excuses left.

Wheat

Fundamentals – While off the extreme highs, the wheat market did close strong yesterday on concerns of the renewed tensions in Ukraine and on the less than ideal weather for the emerging winter crops.  Too early to say if there was any damage done in the plains and south states with this recent bout of could weather but the overall crop has not been getting any better.  On the weekly conditions reports we find 32% of the crop sits in the poor/very poor category, which was up 3% from a week ago.  We have a comparable amount, 34% that is rated good/excellent, which was down 1% from a week ago.  Overall this is not far behind the norms for this time of year but nothing on the horizon would make one think we will be seeing major improvements. 

Weather in other parts of the world has been more conducive to planting progress as Russia reported that spring grains planting is ahead of last years pace with 2.1 million hectares in the ground which is 6.4% ahead of last year.  They intend to plant a total of 31.8 million hectares to spring crops, which would be an increase of 1.7% over last year.  It was also reported overnight that the total grain production for Ukraine for 2013 was 14% higher than the previous year and as of April 1st, the total grain inventory stood at 12.3 MMT. 

Very solid export inspections were reported for wheat yesterday.  For the week ending April 10th we had shipped 25.1 million bushels, which was above the range of estimates as well as the 10-week average of 19 million.  Year to date, we have now shipped just over 1 billion bushels and will need to average 24.9 million per week to reach the USDA target of 1.175 billion.  There are only 7 weeks left in the marketing year. 

Corn

Fundamentals – The corn market held on for a nice bounce yesterday and for May futures, it was actually the 3rd highest close since we began the rally. That said, we have surrendered much of the strength overnight.  While you might suspect that the trade would begin to feel just a but unsettled about the current weather, the forecasts does show warmer temperatures on the way and we all know how fast a crop can be put into the ground once the planters begin to roll. 

There were no surprises in the progress last week as nationwide we have 3% of the corn planted.  The 5-year average for this date is 6% and last year we only stood at 2%.   

Exports were solid and right at the upper side of expectations at 57 million bushels.  Next week we should easily push north of the 1 billion bushel mark as the current to date now stands at 990.92 million bushels.  With the target now set at 1.75 billion bushels we will need to average 38 million per week for the next 20 weeks. 

While the is nothing out and out negative that we have to contend with right now, the news that has rallied us into these levels is becoming tiresome and without some fresh soon, the path of least resistance could be lower. 

Soybeans

Fundamentals – Beans would appear to have the least amount of news to rally on but we did hold gains yesterday and have extended again overnight.  We will have the March crush number released later this morning and the trade is looking for a supportive figure around 146 million but unless it is higher than that, you have to think the number has already been factored in. 

While there is not a nationwide planting number released yet, we do see that Arkansas reports 4% complete, Mississippi stands at 6% and Louisiana is up to 38% complete. 

Exports inspections were basically halved from the previous week coming in at 9.8 million bushels.  This was also the lowest figure since very early in the marketing year before the harvest was into full swing.  Of course we do not need to move many beans to reach the projection as year to date we stand at 1.504 billion bushels and only need to average 3.8 million per week to reach the 1.580 billion target. 

I suspect the rally in beans is more technically inspired than anything else and as I have commented previously, I believe we are in the final acts of this bullish performance. 

www.thehueberreport.com 

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