Corn futures showed some strength again today as short covering by the funds was noted during the session. The May contract was able to trade above $3.80 for the first time in a month. Resistance was present today near the 50-day moving average ($3.79 ¾). The 100-day crossed today at $3.83 ¼ with the 200-day just above at $3.85 ½. A trade at or above those levels is expected to increase the short covering by the funds. They were estimated to be net short about 225,000 contracts going into today’s session. The commitment of traders report this afternoon will give an updated look at the funds net position. After rumors yesterday that China was looking to buy corn, the USDA did confirm a purchase of 300,000 tons of U.S. corn by China for this marketing year. Time will tell if this is a start of a trend, but it has been enough to pull futures up for a couple of days. The wet weather is also getting more attention as this week has seen a lot of articles and pictures highlighting the damage. This is likely to slow planting in areas to the west and will also likely have an impact on the final acreage mix. The acreage and grain stocks report will be released next Friday at 11:00 a.m. central. One estimate today had corn acres at 90.9 Mln., up from last year’s 89.1 Mln. The monthly cattle on feed report will be out this afternoon. Hog futures closed up the expanded $4.50 limit yesterday but did trade freely today. Hog futures have been supported by recent announcements that China has bought U.S. pork.
Soybean futures finished lower today on what appeared to be spreading versus corn. Talk that bean acres will likely be higher than expected due to weather problems out west aided in the weakness today. The bean balance sheet does not need any additional production this year, which forced the new crop months to lead the way down today. The USDA will release its acreage and stocks survey next Friday. One acreage estimate today had bean acres at 85.9 Mln. acres. That would be down from last year’s 89.2 Mln., but not as low as thought a few months ago. The stocks report should remind the trade that bean stocks are at record levels. Soybeans also followed the outside markets weaker today. The DOW spend most of the day trading 400 points lower, while crude oil was down over $1.00. Manufacturing growth concerns in the EU aided to global equity weakness today. The South American weather continues to look good enough as bean harvest in Brazil is continuing to move along. Argentina appears to not have any crop development problems right now.
7-day precip forecast (Mar 22-Mar 29)
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