Closing Comments 5-21-2013
Markets closed mixed today in rather choppy to mainly weaker
trade.
Old crop corn was down a dime, new crop corn was unchanged,
KC wheat was off 7 cents, MPLS wheat was up 2, new crop spring wheat was down 2
cents a bushel, old crop sold beans were up 14 cents, new crop soybeans were
down 4 cents, CBOT wheat was down a nickel, the US dollar ended near unchanged
well off of its high, the stock market made more new all time highs on the DOW
up 52 points, crude was off 55 cents, and gold was down 6 – 7 bucks an ounce.
I thought new crop corn had a great day today. We had news that had some saying that new
crop corn was done; but we managed to shake off the negative news of the best
corn planting weak ever and close unchanged.
We held last Junes lows on the charts; we made new lows for the move and
left a positive candle on the charts.
Now I don’t want to get super bulled up; but it did look like some seen
the new crop corn as holding some value down here. I know I had a couple different feeders
trying to place orders to buy some new crop corn.
As for the fundamentals yesterday told us that almost 42
million acres should hit pollination around the end of July. That maybe makes the market a little nervous
as we have a lot bet on weather for that period.
Technically July beans had a new high close for the year;
making that chart look friendly. We are
just a few cents from the high trade of the year. I have heard numerous comments that the old
crop bean situation is simply not one that can be solved. Some others comment that eventually we will
import some soybeans and that will solve things? Bottom line is the old crop soybean situation
is very tight and the trend is up.
Otherwise not a lot of new news out today. I did think today’s price action should
remind us that the markets we trade are futures markets; so when we get news
like best planting pace ever; but that news was expected we don’t have to have the
type of price move that one would think.
With today’s technology news is instant and can be instantly priced into
our markets.
That gives me some hope for new crop prices. Everyone (advisors and others in the
industry) is rather bearish new crop prices; because of our present fundamental
outlook. But is that already priced into
the market? The advisors will make the argument
that guys will be forced to sell with the big crop coming; but will the
guys? Producers are in better situation
then before; they have more bins then before.
Just because we grow more supply doesn’t guarantee that we will have
more supply for sale; unless of course the price is right.
Having said that I really don’t want to get super bullish
prices either; I think the right move has and will continue to be to make sales
or get protection in place on rallies.
At least enough so that one is comfortable and doesn’t put themselves into
have to sell situations.
Tomorrow we will have our weekly marketing meeting in Onida at
3:00.
As for news; tomorrow we will have ethanol numbers out and
Thursday will be export sales. Monday
brings another update to crop progress; but otherwise weather and money flow
should dominate our markets. I don’t
know what will get the funds interested in buying grains; but hopefully
something can interest them. On weather I
think it is hit and miss what is bearish and what is bullish. Might just depend what money manager wants to
look at it first and what they see. Will
they say rain makes grain or will the focus be on the fact that North Dakota is
only ½ planted on spring wheat and it doesn’t look like much if any is getting
done this week. Will they look at the
fact that we still have about 28 million acres of corn let to plant?
A lot of unknowns out there and some of those could turn out
to be bullish……but keep in mind that unknowns should be adding or keeping a
little premium in our market.
Elsewhere basis felt mixed today; overall maybe a little
firmer for corn, winter wheat, and spring wheat; but also hit and miss. One local ethanol plant is indicating that he
is covered until August and others don’t seem to need much for nearby
corn. They still struggle to sell ethanol
in the Aug-Sept slot; which has basis defensive or at least choppy. Shuttle bids seem to be much better for those
slots; but yet our corn almost has to go to the local ethanol plants or if they
do run someone will get paid fairly well on basis.
The birdseed market feels a little better; as we did trade
some new crop flowers as well as summer slot offers today.
Don’t forget we are offering free delayed price on most all
of the old crop grains and we have room at most of our elevators.
Please give us a call if there is anything we can do for
you.
Thanks