Crops Analysis (VIP) -- May 14, 2013

May 14, 2013 09:58 AM
 

Corn

Price action: May corn futures expired 11 1/4 cents lower at $7.06 3/4. Aside from the September contract, which ended 1 1/4 cents higher, contracts were fractionally to 3 cents lower for the day.

Fundamental analysis: May corn futures expired without any fireworks today. With that support lacking, followthrough buying was lacking in deferred futures. While tight supplies will be supportive for old-crop contracts, this may become somewhat of a background issue until the July contract enters delivery in late June.

Traders showed little concern with the record-slow corn planting pace as planters are actively rolling across the Corn Belt this week amid hot and dry conditions. A wave of rains and cooler temps are expected to reenter the Corn Belt late this week and persist into next week, but early estimates are for around 60% of the corn crop to be planted by Sunday.

Funds, who were active buyers of corn on Monday, sold an estimated 3,000 contracts (15 million bu.) today. Daily fund activity in corn continues to generally set the price tone in futures.

Technical analysis: December corn futures are pausing after last week's downside move as it failed to producer a new for-the-move low. Key near-term support lies at the April low of $5.17. If that support is violated, it would signal the next leg lower is underway, with support at the June 2012 low at $5.11 and then the psychological $5.00 mark. To the upside, it must fill the May 6 gap at $5.52 and push above the April high at $5.70 to spark an extended correction.

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: May soybean futures expired 3 1/2 cents higher at $15.24 1/2. July beans closed 4 1/2 cents lower, the August contract was 1 1/4 cents higher, September beans finished a nickel higher and new-crop contracts were mostly 4 1/4 cents higher.

Fundamental analysis: May soybean futures worked higher again today ahead of the contract's expiration, but there were no major fireworks. Once the May contract expired, traders unwound bull spreads and lightly covered short positions in new-crop contracts.

With corn planting progress finally in full swing across the Corn Belt, there's seemingly less threat of corn acres switching to soybeans. But a new round of rains are expected to move into the region late this week and persist into next week. That could keep November beans on the defensive as some acres will likely eventually get switched.

Technical analysis: Downtrending resistance from the March high intersects around $12.19 1/2 for November soybean futures tomorrow. A push above that trendline could trigger mild chart-based buying, but the level bulls need to clear to encourage more active buying is the April 30 high at $12.40 1/4.

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.

 

 

Wheat

Price action: Wheat futures saw a choppy day of trade today and ended likewise with Chicago wheat steady to 1 1/2 cents higher in most contracts, Minneapolis wheat roughly 1 to 2 cents lower and Kansas City wheat narrowly mixed. This was a mid- to low-range close for most contracts at all three exchanges.

Fundamental analysis: Wheat futures were little changed for the day as the poor state of the winter wheat crop continues to be overshadowed by expectations for a large world wheat crop. Yesterday's Crop Condition Report from USDA showed just a minor shift in the amount of wheat rated "poor" to the "very poor" category, which the market views as a sign the crop may be stabilizing. But if the forecast for heat and dryness in HRW wheat country plays out, more condition downgrades may lie ahead.

Selling interest in the Minneapolis wheat contract was limited by a spring wheat planting pace that remains 20 percentage points behind the average pace, though today's market action signals this is not yet a major source of concern.

Technical analysis: July Chicago wheat futures continue to consolidate in a narrowing trading range. The contract needs a close above the April high of $7.36 3/4 to signal a shift in the long-term trend of lower highs. Near-term support is at $7.00, closely followed by the April 24 low of $6.87 3/4.

Hedgers: 75% sold on 2012-crop in the cash market. No 2013-crop sales advised yet.

Cash-only marketers: 75% of 2012-crop is sold. No 2013-crop sales advised yet.

 

 

Cotton

Price action: Cotton futures overcame early price pressure to finish slightly higher and high-range for the day.

Fundamental analysis: Chinese demand concerns weighed on cotton futures early. Chinese cotton imports dropped 18.5% in April as sales of state-owned reserves slowed demand for foreign supplies. But traders covered short positions late, suggesting they are reluctant to aggressively pile into the short side of the market amid U.S. planting delays and drought concerns in Texas.

With U.S. crop concerns and Chinese demand worries pulling in opposite directions, choppy (and possibly volatile) trade seems likely near-term.

Technical analysis: December cotton futures violated the downtrend from the March high last week, but the contract is struggling to pull away from this trendline. Key near-term resistance stands at last week's high at 87.25 cents, while key support is at the May 1 low of 82.92 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