Radar Maps and Overnight Quote Screens

April 28, 2014 06:21 AM
 

Late last week traders were debating pace of planting and weather forecasts, and today traders are preparing for tonight's USDA planting pace report. Although the Corn Belt remains cooler than normal, there was discussion that most of the Corn Belt is right for planting relative soil moisture. Farmers are anxious and ready to plant.

In other news, traders were contemplating the chance for additional sanctions against Russia over the Ukraine event and what would this might mean for commodities trade and related economies. Overnight trade was higher for the grains, with May corn up 3 cents, old crop beans up 14 cents, SRW May wheat up 2 cents, May soymeal up $6 and new crop December cotton down 0.21 cents.

Weather forecasts offer adverse conditions for planting in the Corn Belt for this week, but they do signal improvement during May.

Our business cycle model had forecast a rally from last week into this week for the grains, and as of overnight we can see a degree of fruition. But for larger, intermediate intra-year price trends, the forecast remains for a setback in May.

Cotton is now forecast for an important top. Therefore, we will be watching to see how the bulls push price this week and whether there will be evidence of a negative reversal by next week. Cool weather for the Corn Belt can interfere with the forecast for at least the corn market.

Traders discussed that last week's 1.5% decline for the S&P 500 relative to last week's additional Ukraine conflict news was really quite minor considering possible volatility. Traders are now contemplating the overnight higher reversal of the mini S&P 500 Index futures from the 40-day average as a possible return of trade to the bullish camp. (Our business cycle model stance is bullish with a short-term bottom due and a larger intermediate uptrend to last until late May.)

The past two weeks of economic and business statistic news could be said to have a positive bias. Some believe there is a chance for an upside surge late spring and summer for the U.S. economy. (Our business cycle model is in agreement with a long-term trend up from the 2009 recession. It forecasts this will continue until 2017 to 2019. An uptrend for the economy means a growing economy.)

This week's calendar offers reports on housing, consumer confidence, oil supply, jobless claims, Fed talk, and PMI manufacture index for April.

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