Crop Analysis (VIP) -- April 25, 2013

April 25, 2013 09:54 AM
 

Corn

Price action: Corn futures settled high-range with gains of 5 3/4 to 6 1/4 cents in old-crop futures; new-crop corn ended around 3 cents higher for the day.

Fundamental analysis: Signs of improved demand and that some bargain buying may be occurring encouraged light short-covering throughout the day. Weekly export sales met expectations and old-crop sales improved from the week prior. Plus, the market received a dose of long-absent daily demand news. China bought 300,000 MT of new-crop corn today and an unknown destination purchased 240,000 MT of corn for 2013-14.

News Argentina trimmed its corn forecast by 200,000 MT to 24.8 MMT also helped the corn market to a high-range finish. Funds bought 8,000 corn contracts (40 million bu.) today.

But buying interest besides short-covering was limited by the forecast for a warm-up in temps, which the market is convinced will help farmers get a large 2013 corn crop planted in short order.

Technical analysis: December corn futures posted a slight upside day of trade and ended back within their earlier consolidation range. Bulls' next target is the April double-top high of $5.51, while support is at yesterday's low of $5.17.

Hedgers: 100% sold on 2012-crop in the cash market. 10% of expected 2013-crop production is sold via cash forward contract for harvest delivery.

Cash-only marketers: 75% sold on 2012-crop production. 10% of expected 2013-crop production is sold via cash forward contract for harvest delivery.

 

Soybeans

Price action: Soybean futures closed 19 1/2 to 27 cents higher in old-crop contracts. September soybeans finished 16 3/4 cents higher. New-crop contracts were roughly 11 to 12 cents higher. All contracts ended near session highs.

Fundamental analysis: A strengthening cash market fueled strong gains in old-crop soybeans today. Shipping delays along the upper Mississippi and Illinois rivers are causing concern about getting supplies to the Gulf for export. In addition, Bunge's CEO said that while transportation bottlenecks in Brazil are improving, he expects shipping delays to continue through summer.

Funds were buyers of an estimated 8,000 contracts (40 million bu.) of soybeans today. This added to the fundamental strength and resulted in a big up day for the market.

Weekly export sales were disappointing as USDA reported a net sales reduction of 206,300 MT for 2012-13 (due to a 281,500-MT cancellation by China). USDA did report sales of 628,500 MT for 2013-14, with China accounting for 534,000 MT of the business.

Technical analysis: The big up day in July soybeans comes after the contract had recently slid to the bottom of the extended, choppy trading range. The contract must push above last week's high at $13.80 to signal a short-term low is in the works and that a move back toward the top of the range around $14.80 may be underway.

Hedgers: 100% sold on 2012-crop in the cash market. 50% of expected 2013-crop production is hedged in November soybean futures at $12.19. 10% of expected 2013-crop production is sold via cash forward contract for harvest delivery.

Cash-only marketers: 75% sold on 2012-crop production. 10% of expected 2013-crop production is sold via cash forward contract for harvest delivery.

 

Cotton

Price action: Cotton futures saw a quietly traded session and most contracts ended in the mid- to lower end of today's trading range. May through December futures ended 16 to 45 points higher for the day, while deferred months were mixed.

Fundamental analysis: The cotton market has done major technical chart damage this week. Thus, today's bullish Export Sales Report for cotton failed to do more than trigger light short-covering. Sales of 237,700 RB for 2012-13 were up 13% from last week and 46% from the previous four-week average, with China the lead buyer. USDA also reported weekly sales of 29,000 RB for 2013-14. Dollar weakness was also encouraging of short-covering.

But concerns about slowed demand from China after the freeing up of higher-quality reserve supplies for feed mill use and the potential drag of the bird flu situation on the country's economy remains a limiting factor.

Technical analysis: December cotton futures briefly broke through support at yesterday's low for a new monthly low of 83.22 cents, but the contract bounced off this level and settled mid-range. Today's low is near-term support, followed by the Feb. 26 low of 82.30 cents.

Hedgers: 50% of expected 2013-crop production is hedged in December cotton futures at 83.87 cents. 50% of expected 2013-crop production is also sold via cash forward contract for harvest delivery. 100% sold on old-crop in the cash market.

Cash-only marketers: 85% sold on old-crop. 50% of expected 2013-crop production is sold via cash forward contract for harvest delivery.

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close