Grain Markets Closing Commnetary 4-11-11

The grain markets had another up and down session today with old crop corn playing a game that is different then the other grains are playing.

Old crop corn lead the way up 8 cents, new crop followed up 3-4 cents, beans where down 24 on old crop, new crop beans where down 16, KC wheat was down 14, MPLS wheat was off 17-18 cents, CBOT wheat saw the near by up 1 while the deferred contracts legged, the US dollar was unchanged, crude is off 3.70 a barrel, and the equities closed mixed with the DOW up 1 point.

Weather pressured the wheat market today on ideas of some forecasts with moisture in them for HRW belt.  Tight old crop corn supplies with no demand slippage yet seen also lead the market headlines today.

Export inspections came out at levels near what is needed to meet current USDA projections and in line with trade estimates.  Corn was 38.8 million bushels just a couple million shy of what is needed on a per week basis to meet current USDA projections, Wheat came in at 28.3 million bushels also just a couple million shy, and beans where 20.8 million bushels which was about 8 million more then what is needed on per week basis to meet current USDA projections.

Technically we did have an outside bearish day on KC July Wheat as we took out the highs from Friday while also taking out Friday’s lows while closing lower for the day.  We did bounce off of a little bit of support; but the chart doesn’t leave me with the best feeling in my stomach; just feels and looks a little weak.

Attached are two charts; the KC July and July corn.  The KC July shows a nice little down trend starting but it also shows we bounce off of the retracement support (former resistance that became support) and it also bounce off of up trend support.  It shows overbought and SS crossing; another double sell signal.  While the corn chart shows that in the past when the blue moving average the simple 4 day got too far away from the 8 day exponential moving average we corrected.  We made a new high contract close as well as all time high in the front month today.  Retracement extensions project 797 and 828; the 828 level also fits well with uptrend line resistance.  STOCH has slowed down the past couple of days.

Basis is steady; at times it feels heavy but producer interest has moved to the fields versus marketing.  Which should help basis stay steady; but we still need demand to stay steady also.  Producer’s attention moving towards the field is another reason this a.m. I mentioned the quote from Ed Usset “Don’t Forget to Sell Something” as seasonally we are entering that time on the charts.  The time when fear adds premium to the markets as well as the time of the year when one of the big equation of the pricing discovery method (producer selling) moves to the sides lines.

Today we traded the highest priced sunflowers we have ever traded; both paid for and sold for.  How much higher that market can go remains to be seen; right now buyers simply lack coverage and we have yet went high enough to destroy enough demand.  Longer term I do wonder if some of our markets are nearing levels where we see demand destruction that takes more then one year to fix.

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