Down Overnight, Rains Across Much of US...
Mar 20, 2012
· Grains sharply lower overnight after yesterday’s weakness; May corn posting an “outside down” chart reversal yesterday
· Other than technical, it’s tough to pin this early week sell-off on any one factor in particular; “Profit taking” seems to be the most popular excuse among the pundits
· Cash markets backed off slightly to end last week and to begin this week, a possible precursor to weakness yesterday and today
· Crop scout Dr. Cordonnier pegs corn acreage at 95.5mil with a yield estimate of 161-162bpa; Soybean acreage pegged at 75.0mil using a 43.5bpa yield
· Southern states making some headway in corn planting; Texas 33% planted, Louisiana 37%, Georgia 19%, Alabama/Mississippi both 4%
· Rains across much of the Midwest helping producers who will look to plant corn in the first few weeks of April; High temps will help to increase soil temps in addition to alleviating some concerns over recent dryness; Rains also helping winter wheat producers a great deal in certain areas
· Rapidly developing winter wheat crop is far ahead of schedule in many areas, leaving some concerned over the possibility of a frost in the weeks ahead
· Argentina truckers strike continues after no deal was made yesterday
· Outside markets mostly negative for grain market action today with crude/equities/metals sharply lower lower, US$ higher
This week’s weather events are certainly a bearish factor for our grain markets. Corn Belt producers who had some dryness issues may now have adequate moisture while increasing soil temperatures. HRW wheat growers across the plains are getting the rains they need, which will do wonders as long as temps stay relatively warm. Yesterday’s chart action for nearby corn and wheat was ugly, and the action overnight doesn’t make it look any better. We’ve said many times that our biggest fear for grain producers would be a sell-off ahead of the March 30th report. We feel as if too many producers have far too little coverage for new crop production, aside from crop insurance. The gap between current prices and your crop insurance level is what needs to be protected. Call the office for recommendations specific to your operation.
As always, call the office with questions or concerns.