Morning Comments - We are going to need to feed the bulls again tomorrow
Apr 08, 2014
Fundamentals – The wheat market was able to hold gains for the close yesterday and posted the first higher high in the past 7 sessions but we have surrendered a portion of the gains overnight. All in all, it was a pretty uneventful session.
NASS delayed the weekly crop conditions report until today. It is not expected to show much if any improvement with conditions in the south and west to remain predominantly in the fair to poor categories. That said, the are forecasts for decent rains to move into the Southern Plains later this month which would of course be very beneficial. The latest 6 to 10 day forecast keeps in the entire middle of the country in below normal temperatures.
Export inspection for wheat came in a little higher than last week at 22.27 million bushels. This brings the marketing year to date up to 975 million bushels, leaving us just 20 million shy of the USDA target.
Fundamentals – The corn market struggled just a bit yesterday but certainly did no damage within the up trend and I suspect traders will be content to sit within this range now through the report on Wednesday. We need to keep in perspective that the trade will be anticipating lowered ending stocks and if that comes in at the estimates, it will have already been factored into prices and we may not see a positive reaction to what could be positive numbers. The average trade estimate for domestic ending stocks is 1.403 billion bushels.
While the USDA has not begun issuing planting progress updates, individual states are and in the south, the progress is pretty comparable with last year but generally behind average. Georgia reports 59% complete vs. and average of 61%, Louisiana at 91% vs. a normal 92%, Mississippi at 41% vs. 63%, Arkansas at 25% compared with 44% and Texas at 54% vs. a normal 52%.
Export inspections were slightly behind a week ago but still respectable at 51.6 million bushels. This brings the year to date tally up to 934 million bushels.
As I commented previously, this market should be directionless into the report tomorrow at 11:00 but with fieldwork on the upswing, we will likely need positive news just to keep our head above water for the time being.
Fundamentals – Nearby beans slipped down to test out the low end of their current trading range yesterday and have been able to bounce back just a bit from there and should remain in this range at least through the report tomorrow. Maybe even more so than with corn, beans are going to require a steady stream of positive news to maintain these levels and that could become increasingly difficult to come by. The average estimates for the domestic ending stocks stand at 139 million.
Export inspections were just a touch higher than the previous week coming in at 18.72 million bushels. Year to date we now stand at 1.495 billion bushels vs. the current USDA estimate of 1.530 billion. We will undoubtedly see this estimate bumped higher again on Wednesday but by how much remains to be seen as is the revised import figure. There is a boat of Brazilian beans that is currently being unloaded at the Gulf.
There were a few states that reported bean planting progress but the numbers are pretty insignificant at this point. Louisiana at 8% compared with a normal 6% and Mississippi at 4% vs. a normal 7%.