COMMENTARY 4/21/16

V-O-L-A-T-I-L-T-Y!!!!

Some 1 – 2” of rain are forecast to impact the S 35% of Brazil corn areas Mon/Tues as the heat wave comes to an end.  There may still be some rain events affecting Argentina Sun/Mon but beyond should be followed by a dry and unseasonably cool weather.   Scattered storms are in store for much of the Corn Belt and Delta tomorrow with another chance for showers for the N Corn Belt and Plains Sun/Mon.

St Louis river level ~EASING @  ~ at 13.6′ and forecast 11.9′ by 4/26.

 CORN

DOWN 10

The funds started buying early this morning, creating an 8 cent rally (that’s an 18 cent range for the day!). Better than expected Export Sales of 47.4 mill bu for old crop vs expectations of 35-47 The majority of business was to Mexico 11.3mill bu, Japan 11.1, Uknown 5.7, Saudi Arabia 4.6, and Colombia 3.4.  These sales are up 6% from the last week and 31% from the 4 week avg.  Also this morning, the USDA flipped a 240,000mt old/new crop  sale to Japan from soybeans to corn. Brazil’s safrinha crop continues and the heat is taking a toll on the crop in N Parana, the second leading safrinha corn producing state in Brazil next to Mato Grosso, which accounts for 23% of total production. One source estimates that approximately 40% of the safrinha corn crop which makes up 67% of total production in Brazil IS at a moisture deficit.   No one knows if the Funds are done.   “The market can remain irrational longer than you can remain solvent” –  John Maynard Keynes

Last Monday’s

US PLANTING PROGRESS

13% THIS WEEK, 4% LAST WEEK, 7% LAST YEAR, and 8% AVG

IL PLANTING PROGRESS

12% THIS WEEK, 2% LAST WEEK, 11% LAST YEAR, and 14% AVG

 

BEANS     

UP 9

The Funds and managed money continues to buy!  Their total now is est to be LONG  135,000-140,000 contracts. Back in 2012, the Fund’s LONG position was approx. 250,000 contracts.  They have the buying power if  they deem that the fundamentals/technicals warrant.  Argentina harvest is est at 16.4% complete vs 15.0% last week, and 46.0% last year. There is still plenty of time to rework balance sheets as the crop shrinks, or grows!  If the crop shrinks, and US sales increase, that will make our C/O shrink, albeit GREAT for our export business.  Export Sales were  were within trade estimates at 15 mill bu.

 

WHEAT          

DOWN 8

Fund buying was present early but backed off mid session, allowing futures to fall.  If farmers in the Dakotas were thinking about planting spring wheat instead of corn/beans, the recent rally in beans could give them second thoughts.