Market Analysis: February 27

Corn

May Chicago Board of Trade corn is trapped in a sideways trend between resistance at $4.00 and support at $3.73 3/4.  Price has dropped below the 10 and 20-day moving average which now create resistance for prices to move higher.  The closer downside support is the February low of $3.83 and a break through this would be a bearish signal.  Overall, choppy, sideways movement is expected to prevail.

Corn

Wheat

May Kansas City wheat rallied slightly on Thursday.  The long-term trend is bearish but there may be a bottom forming.  Contracts are over-sold and the market is vulnerable to a corrective bump.  Support lies at the Thursday (26) low of $5.21 3/4 and resistance is the Feb 24 high of $5.47 1/4.  Spotty winter kill in the US is also supporting a minor increase in prices.

Wheat

Soybeans

May Chicago Board of Trade soybeans are in a short-term bullish pattern.  The 10-day moving average support level of $9.94 1/2 was tested this week and held.  Major support lies at the January 30 low of $9.61 3/4.  Initial resistance lies at $10.32 with larger resistance at $10.67, the January 8 high.  The 10-day moving average support needs to hold to keep the bullish pattern.

Soybeans

Tucker Talk: February 27

Corn

We find corn in a conundrum this week as it is facing two different supply/demand situations.  The first situation is a decrease in estimated feed usage thus an increase in estimated 2014-2015 ending stocks.  Reports also have producers holding 50% of last year’s crop hoping summer weather will result in higher prices.  Price prediction models predict up to a $0.50 decline in old crop futures if ending stock projections increase to 2 million bushel from the current 1.8 million.

The second supply/demand situation is tightening of new crop projections.  Lower prices may reduce plantings, below average weather forecasts are reducing estimated yields, and new crop export projections are increasing.  The major questions is do large ending stocks pull price down or does the tightening new crop situation pull prices up.  Everyone is waiting for the USDA acreage update on March 31 to answer this question.

Wheat

Wheat is not doing anything terribly exciting, except going down of course.  Egypt canceled a tender last week and bought a tender on Tuesday this week causing prices to fluctuate but have not stopped the downward trend we are seeing.

Moisture is looking good for world wheat production with no large impacts expected.  Cold temperatures may result in spotty winter kill in southern IA, central IL, central NE, and central IN but no major losses are expected.  Overall world wheat production looks good and the downward trend in prices is no surprise.

 Soybeans

There were some interesting things happening in Brazil this week.  Soybean prices went up on Monday due to truck strikes over new Brazilian diesel fuel taxes.  Prices quickly retreated at news of a judge threatening to issue a back to work order.  Effects were not expected to be significant but the strike continued well into Thursday, significantly reducing truck arrivals at the port of Paranagua (from 900 trucks per day to 50).  The Brazilian government wanted to negotiate but could not determine who was leading the strike.  News this morning (Friday) says that law enforcement officials have begun arresting and citing protestors which has led to a reduction in road blockages.  Truck traffic to Paranagua is increasing but there are still 42 shipping vessels waiting to be loaded.

Further support for increasing soybean prices comes from the deteriorating situation involving taxes and inflation in Brazil.  Brazilian farmers are holding increasing numbers of soybeans to combat increases in inflation and taxes.  Demand for soybeans should shift to the US but traders seem content in waiting out the Brazilian trucker strike.

Welcome to Farmer Scoop

Hello everyone.  This is a newly created blog for the Farmer’s Coop Elevator in Hemingford, Nebraska.  Farmer’s Coop has locations in Alliance, Gordon, Hay Springs, Mirage Flats, and Hemingford.  Throughout our locations we deal in agronomy, feed, grain, and retail.  The grain department buys corn, winter wheat, spring wheat, soybeans, barley, millet, oats, and sunflowers.

This blog is a working progress for the grain origination department.  My goal is to create exposure and try to connect with customers on a different level.  This blog will hopefully contain market information and analysis, contract information, company going ons, helpful marketing tips, and so much more.  I hope to get guest bloggers from the agronomy department to blog about topics such as weed management, chemical spraying tips, planting tips, and other things to help with crop establishment.

My name is is Tucker Hamilton, the newly employed grain originator at the Hemingford location. My current plan is to provide, at the very least, a weekly market update at 12:00 PM every Friday that summarizes the market happenings of the previous week.  I will try to provide relevant information that will help producers in making their marketing decisions on their crops.  Stay tuned for more updates.