The grain markets have rallied substantially over the course of the last couple of months. This rally appears as though to have lost some steam as the bullish news to drive the markets higher has become scarcer. Adding to the lack of bullish news is the anticipation for large acreage to be planted to soybeans and a large South American crop to be finished harvesting. Some key technical resistance areas are also keeping a lid on prices for the time being.
Corn has traded in a relatively tight range recently, unable to close above recent highs around $4.90 and staying above support in the $4.77 area. Fundamental demand has kept a bid under the market. Ethanol rebounded from a sharp decrease last week adding about 22,000 barrels per day of production to rise to 891,000 barrels per day. Crush margins at Iowa plants and prices for DDGs will continue to provide economic incentive to produce ethanol at a high level. Export sales beat expectations and were reported as 745,800 MT on the old crop. For the marketing year, corn is running approximately 239 million bushels ahead of the seasonal pace to meet the current USDA projections.
Soybeans suffered significant technical damage in Thursday’s price action. Early in the session, the market approached near-term highs around $14.60. Soon after selling hit the market leading to only 2 cent gains on the day. Technicians could view this as a signal that this market is now poised to move lower. Adding to the bearish technical landscape is rumors that China may or has cancelled cargoes of Brazilian beans and rerouted to the U.S. These rumors are yet to be confirmed. Demand remains seasonably strong with NOPA crush figures beating expectations and export sales running about 225 million bushels ahead of pace to meet USDA projections. Export sales this week were reported as 202,200 MT for the old crop.
Wheat hit the highest level since last June 26th on Thursday only to sell sharply after. Technical selling hit the market hard after touching the multi-month high. The rally has been pushed by political unrest in the Black Sea region and dry conditions in the Southern Plains. Mid-day forecasts showed better chances of precipitation for the areas in need allowing the market to sell. Export sales remain steady and were reported as 401,800 MT on the old crop. For the marketing year, wheat export sales are about 24 million bushels ahead of the seasonal pace to meet the USDA projections.
The rally for the grains over the last couple of months needs new bullish information to keep charging higher. The markets are hovering around near-term highs, but have suffered some setbacks as the bullish fuel has been few and far between. The focus of traders and producers is moving towards the March 31st USDA reports.
To speak directly with a broker dial 1-877-472-4607
Visit us online at www.GrainHedge.com
THERE IS A SIGNIFICANT RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.