Crops Analysis -- Advice (VIP) -- June 26, 2013

June 26, 2013 10:06 AM
 

Corn

Advice: Cash-only marketers are advised to make the final 10% 2012-crop cash sale to get to 100% sold on old-crop.

Price action: July corn futures finished 7 3/4 cents higher, while deferred contracts were fractionally to 2 1/2 cents lower.

Fundamental analysis: July corn futures were supported by tight stocks. With the delivery process for the lead-month contract starting Friday and no deliveries expected, selling interest is limited. Price action in July corn could be volatile through the delivery process.

New-crop futures were mildly pressured by weather today as warmer conditions along with rains pushing across the Corn Belt are seen as favorable for crop development. But excessive wetness in key production areas limited selling interest.

Position evening ahead of USDA's key report data on Friday also limited both buying and selling interest in deferred futures today. More choppy, pre-report trade is likely tomorrow.

Technical analysis: December corn futures continue to chop between key support at $5.12 and key resistance at $5.73 3/4. Given these wide parameters, more choppy near-term price action is likely.

Hedgers: 100% sold on 2012-crop in the cash market. 25% of expected 2013-crop production is sold via cash forward contract for harvest delivery.

Cash-only marketers: NEW ADVICE: Make the final 10% 2012-crop cash sale to get to 100% sold on old-crop. 25% of expected 2013-crop production is sold via forward contract for harvest delivery.

 

 

Soybeans

Advice: Cash-only marketers are advised to make the final 10% 2012-crop cash sale to get to 100% sold on old-crop.

Price action: Soybean futures firmed in early trade led by the old-crop July contract, set back and then surged into the close, finishing near the highs for the day. July close up 9 cents in bull spreading while the November and later contracts finished 2 1/2 to 5 cents lower.

Fundamental analysis: A surge in Gulf basis in early morning trading lifted July futures as traders again focused on tight old-crop supplies. A firming dollar and forecasts for rain to move into drier areas of the Corn Belt brought light pressure on the new-crop contracts.

The market is also readying for USDA's acreage report Friday, which is expected to show nearly a 1-million acre increase in soybean plantings from March intentions.

Technical analysis: July futures firmed early, settled back and then surged at the close to finish the day near its highs and to close above the light resistance around $15.30. The $15.40 is a stronger area of resistance. Support sits near the $14.90 area.

November futures traded below Tuesday's low and failed to take out Tuesday's high but the contract did close near the daily highs. The $12.50 area offers support while $12.80 is forming resistance. Some traders are watching momentum indicators, which seem to point to a loss of bullish momentum in new-crop futures.

Hedgers: 100% sold on 2012-crop in the cash market. 20% forward priced on expected 2013-crop production for harvest delivery.

Cash-only marketers: NEW ADVICE: Make the final 10% 2012-crop cash sale to get to 100% sold on old-crop. 20% of expected 2013-crop production is sold via forward contract for harvest delivery.

 

 

Wheat

Price action: Wheat futures favored a firmer tone in overnight trade and started the daytime session with gains, but softened mid-morning and extended losses into the close. Chicago wheat ended 6 to 8 3/4 cents lower, with Kansas City down 4 to 10 cents. Minneapolis wheat ended widely mixed, with July down 10 1/4 cents and September up 1/4 cent.

Fundamental analysis: Early support was tied to short-covering and spillover from corn, but strength in the dollar index and the ongoing harvest returned control to bears. While harvest results have varied across the Plains, yield reports have generally improved in Kansas.

Traders are also beginning to more actively even positions ahead of Friday's key USDA reports. Traders expect the Grain Stocks Report to set 2012-13 carryover at 750 million bu., which would be up slightly from USDA's carryover peg earlier this month. Meanwhile, traders expect USDA to lower its spring wheat planted acreage estimate by around 584,000 acres from March intentions, which should limit pressure on Minneapolis futures.

Technical analysis: September Chicago wheat futures posted a downside day of trade on the daily chart and are now hovering above contract-low support of $6.73 3/4. Violation of this support would open significant downside risk as it would layer support every 25-cents lower, making bears' next target the $6.50 level.

Hedgers: 100% sold on 2012-crop in the cash market. No 2013-crop sales advised yet.

Cash-only marketers: 100% sold on 2012-crop. No 2013-crop sales advised yet.

 

 

Cotton

Price action: Cotton futures ended low-range with losses of 125 to 151 points in all but the October contract, which finished 66 points lower.

Fundamental analysis: Strength in the U.S. dollar index after yesterday's strong gains encouraged profit-taking today. Traders are also reducing some risk exposure ahead of USDA's acreage update Friday. It is expected to remind of a big decline in cotton seedings this year, but this is already largely factored into prices.

However, concerns about crop development delays for cotton are limiting the market's downside. Plus 23% of the crop is rated in "poor" to "very poor" condition, with 37% of the Texas crop in these categories.

Technical analysis: December cotton futures saw an inside day of trade, leaving near-term support at yesterday's low of 83.05 cents, followed by the June low of 81.72 cents. The 85.00-cent level has restricted buying interest the past two days, marking it as initial resistance, followed by the May high of 87.25 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