Untitled Document

CORN:

Monday’s first report came with the weekly export inspection report showing 38 million bushels of corn was inspected for near term export- up from 33.3 the week prior and four week average of 34.7. We know demand remains good especially into Asian markets but the pull back in prices last week saw a good pick up due to value. We are not likely to exceed last year’ pace in total but the year since January 1st after the economic collapse, we have seen a steady improvement. Demand remains good, but not great. The cattle market continues its recovery from the 2008 late year collapse with Friday’s cattle on feed report showing cattle placed on feed in March to be fattened on corn were up 4%. The Obama ethanol increases for 2009 remain intact but its foreign demand and usage that has our ending stocks dropping. After the close at 3p central time corn the Corn Crop Progress Report came out showing 5% of the projected 84.0 million acres to be planted are now seeded vs. 2 last week; 4 a year ago, and 14% on our 5 year average. Key Midwest producers read like this: Indiana 0 vs. 9 on the 5 year average. Illinois 1 vs. 23. Iowa 6 vs. 10. Missouri 7 vs. 42. Nebraska 3 vs. 6. Ohio 2 vs. 7%. It certainly suggest we are far behind the normal pace but we are no further behind than a year ago when we were equally wet with delays and even though we planted most acres later than normal, they all got in so planting pace is more psychological than fact. WXRISK.COM sees Wednesday to Saturday as warm and dry across the Midwest. On Sunday and Monday rain enters IA, NE, ND, SD, WI, MI, and Northern IL and IN; however, Central and Southern Illinois and Indiana stay dry through Monday. So about 40% of the grain belt will plant through next Tuesday and 100% through Saturday next Monday’s Crop Progress Report will show a good jump in planting. We entered this week with support at 3.64 basis May futures. Monday’s low was 3.604 but closed over support. A close under support set up 3.48 as next support. If 3.64 hold then 3.84 is first resistance. Demand is good but not great. The planting window is opening up a little so it’s going to be hard to post a strong rally, yet with framer’s holding onto cash corn on the farm and working fields and the uncertainty of the growing season. The downside too is limited. Aggressive traders can buy support with tight stops.

BEAN:

Monday’s Weekly Export Inspection Report showed 15.6 m.b. of beans were inspected for near term export, down from 23.7 the week prior and 4 week average of 20 m.b. Key player China was in for 7 m.b. of the total. Where it made sense a drop in corn prices last week took corn inspections higher, a rally to 3 month highs on beans last week took inspections lower. Until we collectively see a weak trend develop, weekly we have to assume demand will remain not just good, but great near term. Nothing suggests China’s done building reserves. On Friday, an exporter here said they sold 275 t.m.t. of beans to an unknown destination. In the 1970’s unknown destination meant Russia. Today it means China. Last night’s Crop Progress Report for beans did not come out as it is too early. We should get our first of the year next Monday. After hitting new highs on the year Friday and testing a key chart resistance at 10.70 large traders came in with profit taking on their minds. Assisting them was a Dow Futures off over 200 points and crude oil down over 4 dollars. There is no change in fundamentals. South American harvest continues to be disappointing with Argentina cutting their crop estimate from over 50 m.m.t. to 37 this week end. Most believe another cut is coming. This all keeps are demand pace robust but psychology will turn more to weather results by May 1st, when bean planting here kicks in. Today (Tuesday), the USDA announced another sale to China of 180 t.m.t. May support of 10.10 held in overnight trade. Any break to 10.15 basis May turn and buy July futures with a 15 cent stop.

WHEAT:

Monday’s Weekly Export Inspection Report was just like every other one this year- showing weak demand. It came in at 14.2 m.b. vs. 20.6 the week prior and 4 week average of 18.5. No demand in site now until the last half of May when early harvest starts coming in and then is when the export pace is determined by the availability of high quality milling wheat. After the close at 3p Central Time, our Crop Progress and Condition Report came out showing the winter wheat crop condition at 43% good to excellent condition up 1% from the week prior and 2% under a year ago. Key producers Texas was 10% down 2 on the week with Oklahoma 12% G-E down 4 on the week. Key big U.S. producer Kansas was 44% G-E up 7% from the week prior but only 1% the crop had to head developed and traders are waiting for more head development to determine if the early April freeze damage surfaces. Until then the crop condition overall is poor even though up 1% on the week. The eventual crop rating comes late May will determine wheat’s value on the export market. To be a primary port of origin we will need a G-E rating over 60%. If we stay in the 40s the best chance for a rally is a supply side concern pop up but it would be very limited to no higher than 5.90 if rains drop. The best hope for summer rally is a high rating bringing demand to the U.S. Ports. The Spring Wheat Crop Progress Report showed 6% of the crop is now planted vs. 19 a year ago and 5 year average of 21%. The big over wet loggers are South Dakota 11% seeded vs. 31 a year ago. North Dakota 0 vs. 14, and Montana 6 vs. 25 a year ago. I am not concerned about the delays as we have all of May to dry up and catch up but this certainly shows our recent weather problems. May continues to find chart support at 5.00. A close under and 4.80 is next stop.