Crops Analysis (VIP) -- May 20, 2013

May 20, 2013 09:31 AM
 

Corn

Price action: July and September corn futures closed 3 1/4 and 1 1/2 cents lower, respectively. New-crop contracts finished fractionally to 1 1/4 cents higher.

Fundamental analysis: Corn futures were weaker for most of today's session amid expectations this afternoon's progress report from USDA will show very active corn planting over the past week. But corn planting will be slowed this week by expected rains across the Corn Belt. That, along with technical-based trade -- bull spread unwinding and short-covering -- allowed new-crop futures to firm into the close.

Funds were mild sellers today, selling an estimated 4,000 contracts (20 million bu.) of corn.

Technical analysis: December corn futures traded below the April low of $5.17 today, but closed above that level. Today's low at $5.14 is now initial support. Stronger support lies at the June 2012 low at $5.11, followed by the psychological $5.00 mark. To the upside, last week's high at $5.44 is initial resistance in a long string of overhead hurdles for bulls.

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 saw a choppy day of trade thanks to active bull spreading. July and August futures ended 16 and 12 1/2 cents higher, respectively. September beans ended 4 3/4 cents higher and new-crop contracts were 1 1/4 to 3 1/4 cents lower for the day.

Fundamental analysis: Tight old-crop supplies remain a source of support for old-crop beans, especially given the possibility of Brazilian port strikes. Basis levels remain well above the historical norm for this time of the year.

Meanwhile, the market expects soybean planting to have advanced to 24% complete as of Sunday. While this would be the slowest pace for this time of the year since 15% in 1996, expectations for huge advances in corn plantings has traders anticipating farmers will soon shift their attention to soybean seedings.

Technical analysis: July soybean futures traded through and closed above resistance at the March high, opening upside potential to the February high of $14.83 1/2. Former resistance at the April high of $14.23 3/4 is now near-term support.

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: Futures gained strength late in the day after trading lower in the early going. Chicago wheat closed generally fractionally to 2 cents higher. Kansas City wheat was 3 to 7 cents higher in most contracts. Minneapolis wheat finished mostly 4 to 7 cents higher.

Fundamental analysis: Futures started on the defensive amid spillover selling from corn futures. But concerns over potential flooding in the Northern Plains and continued delays in spring wheat seedings pulled the Minneapolis contracts higher and drew the Kansas City and Chicago contract higher, as well. Meanwhile, recent rains and storms in the Plains missed the driest areas of the HRW crop, raising concerns over crop quality and final yield.

Technical analysis: July Minneapolis futures traded on both sides of Friday's trading range, starting weaker and then firming as the trading day progressed and finished with a bullish reversal. While positive, the trading action did not change the chart picture from its recent, sideways trend. But it does hint the $8.00 mark is becoming a solid support area. There's solid resistance around the $8.30 area.

Chicago July futures traded lower, as well, initially, and surged higher to close near the day's high. Support exists at the April low of $6.64 3/4. Resistance rests at $7.40.

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 closed 35 to 70 points lower, which was in the lower half of today's range but off session lows.

Fundamental analysis: Two-sided price action was seen in the cotton market today as neither bulls nor bears were willing to take an aggressive stance to start the week. Support came from sharp losses in the U.S. dollar index and concerns with slow planting across the South and persistent drought in Texas. But that was countered by expectations demand will slow unless prices decline.

Technical analysis: December cotton futures are consolidating after recently halting the downtrend from the March high. To spark fresh chart-based buying, the contract must push above the May 9 high of 87.25 cents. To the downside, 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