Grain Futures Update

News & commentary on Grain Futures markets including wheat, soybeans, corn & more.

Grain Futures Update is a blog dedicated to bringing updates, news and commentary on grain futures markets including the commodities wheat, corn, soybeans and more.

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WASDE REPORT: BULLISH CORN. BEARISH SOYBEANS AND WHEAT. MEAL/OIL SPREADS IN FAVOR OF OIL

Posted on 12/13/2017 6:51:42 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

 

Lower closes for Minneapolis, Kansas City and Chicago wheat along with rough rice, corn, soybeans, soymeal and soy oil. The bottom line for the WASDE REPORT is bullish for the corn while bearish for the wheat and beans. Rain is now in the forecast for Brazil which had some showers already which is helping ease the dry weather scare and the MEAL/OIL spreads shifted back in favor of oil several days ago leading to a fairly sharp drop in the bean complex. However, my buy signals, technically, are still okay but .......................The wheat complex continues overall to be in a downtrend with Minneapolis and Chicago making new CONTRACT LOWS AND CLOSES on Tuesday with KC doing the same on Monday. Minneapolis had its nearest resistance above 620 while KC and Chicago above 430. Enough said for now unless you want me repeat what I've been reporting over and over since whenever! Oats seem to be in a BEAR TRIANGLE after having REVERSAL TYPE ACTION on Monday (worst low since 9/9/17). Also, oats also need to hold the 240 area. On the other hand rough rice has stalled since hitting resistance three weeks ago but still are in a possible bottoming formation needing to settle over 1260 in my opinion for a seemingly major turnaround. Corn continues in a down trend overall making a new CONTRACT LOW AND CLOSE in spite of a moderately bullish report. We will have to see the action for the next few days to get a good handle for the short term. Huge resistance remains overhead making a close over 375 very important. Still, reaching four dollars seems to be more of a dream at this time while the 360 - 400 range remains a formidable looking resistance area that I don't expect to be penetrated any time soon. Beans and meal have led the way down since my last report while oil went in to a consolidation mode. The latter two have dropped five consecutive days with the beans making their lowest low and close since Nov.17th but now in a support area. Meal has support around 420. Oil should head lower but at a slower pace if spreading against the meal continues. BUY SIGNALS FOR SOYBEANS AND SOYMEAL. SELL SIGNALS FOR MINNEAPOLIS, KANSAS CITY AND CHICAGO WHEAT ALONG WITH CORN AND OATS. For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 

 

 


WASDE REPORT: BULLISH CORN. BEARISH SOYBEANS AND WHEAT. MEAL/OIL SPREADS IN FAVOR OF OIL

Posted on 12/13/2017 6:51:24 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

 

Lower closes for Minneapolis, Kansas City and Chicago wheat along with rough rice, corn, soybeans, soymeal and soy oil. The bottom line for the WASDE REPORT is bullish for the corn while bearish for the wheat and beans. Rain is now in the forecast for Brazil which had some showers already which is helping ease the dry weather scare and the MEAL/OIL spreads shifted back in favor of oil several days ago leading to a fairly sharp drop in the bean complex. However, my buy signals, technically, are still okay but .......................The wheat complex continues overall to be in a downtrend with Minneapolis and Chicago making new CONTRACT LOWS AND CLOSES on Tuesday with KC doing the same on Monday. Minneapolis had its nearest resistance above 620 while KC and Chicago above 430. Enough said for now unless you want me repeat what I've been reporting over and over since whenever! Oats seem to be in a BEAR TRIANGLE after having REVERSAL TYPE ACTION on Monday (worst low since 9/9/17). Also, oats also need to hold the 240 area. On the other hand rough rice has stalled since hitting resistance three weeks ago but still are in a possible bottoming formation needing to settle over 1260 in my opinion for a seemingly major turnaround. Corn continues in a down trend overall making a new CONTRACT LOW AND CLOSE in spite of a moderately bullish report. We will have to see the action for the next few days to get a good handle for the short term. Huge resistance remains overhead making a close over 375 very important. Still, reaching four dollars seems to be more of a dream at this time while the 360 - 400 range remains a formidable looking resistance area that I don't expect to be penetrated any time soon. Beans and meal have led the way down since my last report while oil went in to a consolidation mode. The latter two have dropped five consecutive days with the beans making their lowest low and close since Nov.17th but now in a support area. Meal has support around 420. Oil should head lower but at a slower pace if spreading against the meal continues. BUY SIGNALS FOR SOYBEANS AND SOYMEAL. SELL SIGNALS FOR MINNEAPOLIS, KANSAS CITY AND CHICAGO WHEAT ALONG WITH CORN AND OATS. For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 

 

 


Friendly USDA Report Fails to Inspire Corn

Posted on 12/12/2017 4:59:17 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

The March corn contract posted an new contract low on a day the USDA released what was seen as a mildly friendly report.  The initial reaction to the report was positive, but weakness in soybeans and wheat spilled over to the con market.  What happened and what could this mean for corn going forward?

On Tuesday the USDA released the December World Agricultural Supply and Demand Estimates (WASDE) report.  For corn it was a slightly bullish report with ending stocks coming in below trade estimates.  The lower ending stocks number came from a 50 million bushel increase in corn used for ethanol while the USDA left export demand unchanged.

The higher estimate for corn used for ethanol seemed likely as ethanol production has been significantly higher then what was needed on a weekly basis to hit the target the USDA estimated in the November report.  The reasoning the USDA used was that China's recent large purchases of sorghum would take away some of the domestic ethanol feedstock supplies and that corn would be needed to fill the void.  The USDA left exports unchanged however, and many analysts believe that current projections are too high as corn exports are running well behind levels needed to hit the USDA target.

The initial reaction to the report was positive for corn, at one point trading 4 cents higher on the day.  Shortly after the report corn tested it's 20-day moving average which has been significant resistance lately.  However, by the end of the day corn had reversed lower in an outside sweeping down day to close at new contract lows.  This meltdown also shattered a potential inverse head and shoulders bottoming formation.

While the report was mildly friendly for corn is was slightly bearish for soybeans and wheat.  Even so, soybeans and wheat tried to play along with corn initially with both going higher on the day.  But, mid-day weather changed the tone dramatically.  The mid-day weather forecast came out about an hour after the report and added more confidence for much needed rains in Argentina for the late 10-14 day outlook.  This weighed heavily on soybeans and ultimately too corn and wheat down as well.

Technically speaking, this was a difficult day for the grain complex with chart damage happening across the board.  What posted yet another new contract low (but is getting very oversold in the near term).  Soybeans broke key trend line support as did soybean meal.  And, corn not only made new contract lows but had an outside sweeping reversal down day that may have shattered the hope of an near term bottoming formation.

Today did not bode well for any immediate strength in the grains.  Unless the Argentinean forecast dries up dramatically there could be more downside follow through to come. It is a difficult time of year to be very bearish in the grains markets and South American (particularly Argentinean) weather will be key, but unless there are some real weather issues it could be a long winter for grain bulls. 

Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action.  Ted Seifried - (312) 277-0113.  Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.  Follow me on twitter @thetedspread if you like. 

March Corn Daily chart:

 

January Soybeans Daily chart:

March Wheat Daily chart:

 

Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


Was that the High or a Correction in Soybeans?

Posted on 12/12/2017 4:29:42 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

After new recent highs earlier in the week soybeans have pulled back on a wetter forecast for Argentina in mid December.  Soybean meal, which had been pulling the soybeans higher has also pulled back from contract highs.  So is the party over for soybeans?  Or is this just a technical correction before going higher once again?

Soybeans had managed an over 80 cent rally off of the August 16th low but have given back more than 20 cents after failing to break out over the mid-October highs.  Much of the strength has come from dryness concerns in Argentina and a long term La Nina forecast (which can mean a warm and dry growing season for Argentina).  However, to this point Brazil looks good and it is very early in the Argentinean growing season with soybeans just over 50% planted and corn roughly 40% planted.  With a little more rain in the forecast for Argentina the soybean rally has lost some steam.

Much of the recent strength in soybeans has come from soybean meal.  The March soybean meal is also well off the mid-August low but in early November was looking flirting with a breakout to the downside.  However a big reversal on November 17th had sparked upside follow through to new contract highs before selling off.  With the soybean meal pushing into overbought territory and leaving nearby chart gaps to fill this was a likely area for a profit taking correction.

There is also a growing concern over soybean exports.  Currently the USDA is projecting a 3.5% increase in soybean exports over last year but as of last week we are running 15.7% behind the pace of last year.  Now, it is important to note that weather issues in South America did account for strong soybean sales at this time last year and it is very early in the marketing year.  Still, it is concerning that we are falling so far behind the sales pace of last year.

Looking at a January soybean chart there is a distinct possibility that we could be putting in a triple top formation.  This may have some of the long speculators nervous and global end users feeling more comfortable.  However, with soybean meal being the leader on the last push higher it may make more sense to focus on a soybean meal chart.  Which, in my opinion still looks strong.  The recent correction off of highs has not done any major chart damage so far and if meal can hold the uptrend line it may go back and at least test highs again.

While a little more rain for the Argentina forecast was a bearish trigger to spark a bit of a sell off it may not be a change in the overall weather pattern.  It is very early in the growing season and Argentina will need to see consistent follow up rains.  So, unless this is the start of a major change in the weather pattern this could just be a correction in soybeans and soybean meal before going higher.  Keep an eye on weather and the soybean meal chart as it may tell the story.

Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action.  Ted Seifried - (312) 277-0113.  Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.  Follow me on twitter @thetedspread if you like. 

March Corn Daily chart:

 

January Soybeans Daily chart:

March Wheat Daily chart:

 

Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


Can Soybeans Keep it Together?

Posted on 12/7/2017 4:20:42 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

Corn and Wheat continue to be under pressure, but the soybeans have managed to hold their ground.  While there could be some negative fundamentals lurking for soybeans they have been the strongest component of the grain complex for some time now.  Can soybeans continue to stay relatively strong compared to corn and wheat, or will they play catch up soon?

There are growing questions about soybean exports reaching the USDA forecast.  Both export sales and shipments are falling well behind the pace of last year while the USDA is looking for a 3% increase in exports this year.  This comes at a bad time because we are right in the heart of our soybean export season.  There sill is a lot of time left in the marketing year, and soybean demand has consistently outperformed expectations in recent years, but the lackluster sales and shipments is a growing concern to say the least.

If there were a big problem in South America the US soybean supplies could fall quickly as we compensate for a short crop.  However, South American weather also looks mostly good so far.  There is some concern about La Nina having a negative impact on the Argentinean crop but with Argentina only about 50% planted at this point it is too early to tell.  The market may be holding some weather premium just in case.

It's that time of year again, the acreage debate is starting to heat up.  The USDA got it officially started this week issuing a Baseline forecast of 91 million acres of soybeans and 91 million acres of corn.  If realized this would be a small increase in corn acres and an 800k acre increase in soybean acres (mostly coming at the expense of wheat).

Depending on who you ask this might be too much or too little of an increase in bean acres.  On one hand the corn/bean ration is favoring more soybean acres as soybeans are values 2.62 times higher than corn.  Also, in a tight margin climate bankers may be looking to encourage producers to plant soybeans with lower input costs.  On the other hand US producers feel comfortable planting corn after a year with less than perfect weather and still managing to make record (or at least near record) yields.  The rotation has also gotten more soybean heavy in the last few years and some producers may have a need to go back toward corn.  We will see how this shakes out, but it seems likely that we will have a lot of soybean acres.

However, despite the potential negative fundamentals on the horizon the path of least resistance for soybeans may be higher in the short to near term.  Why?  Well, look at a soybean meal chart.  Soybean meal has been sharply higher in the last few weeks and is testing the highs from the last 6 months.  Some of this may be coming from concern about Argentina and La Nina as Argentina exports a lot of soybean meal.  Some of this may be coming from the aggressive pace of putting animals on feed here in the US.  Some of this may be coming from the idea that China will be back in the market for US DDGs and the feedstock market could get tighter.  Some of this could be a oilshare re balancing from the large speculators.  Either way, soybean tend to rally when soybean meal does.  Soybean meal could fail here in an epic 2 month double top, but  if not soybeans may want to follow higher.  Keep an eye on meal.

Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action.  Ted Seifried - (312) 277-0113.  Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.  Follow me on twitter @thetedspread if you like. 

December Corn Daily chart:

 

January Soybeans Daily chart:

December Wheat Daily chart:

 

Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


DRY WEATHER IN SOUTH AMERICA. OVERSOLD? 40% MGD MONEY COVER SHORTS. MEAL LEADS WAY

Posted on 12/6/2017 7:10:55 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

 

Higher closes for rough rice, corn, soybeans, soymeal and soy oil while lower closes for  oats, Minneapolis,Kansas City and Chicago wheat. THE BIGGEST THING HAPPENING RIGHT NOW IS THE CONTINUATION OF THE MEAL/OIL SPREADS WORKING IN FAVOR OF THE MEAL WHICH USUALLY HAPPENS WHEN THE BEAN COMPLEX IS BULLISH. ON THE OTHER SIDE OF THE COIN WE STILL HAVE A LARGE SUPPLY PROBLEM ALONG WITH LAGGING EXPORTS. Yes, dry weather in South America can be a problem but its early yet. With meal leading the way the bean complex has been holding up the corn while wheat continues to seem like a lost cause. With managed money covering around 40 % of its short position much buying pressure has been eliminated which could shorten this rally. Still, I now have buy signals as seen below.The wheat complex continues overall to be in a downtrend its latest since July. Minneapolis is now in a decent support area while KC and Chicago made new CONTRACT LOWS (11/28/17) but settled higher in REVERSAL TYPE ACTION. Oats just made their worst low and close since Oct. 12th while looking toppy and even a support area at this time. continue to trend higher since the beginning of September steadily approaching a good looking resistance area around 283. Oats also need to hold the 240 area. On the other hand rough rice seems to be in a possible bottoming formation needing to settle over 1260 in my opinion. While rice has rallied since Nov. 14th it has been consolidation over the last couple of weeks.Corn continues in a down trend overall but really hasn't been doing much lately and the rally in the beans and meal have also helped buoy this market. Huge resistance remains overhead making a close over 375very important. Still, reaching four dollars seems to remain more of a dream at this time. Corn DOUBLE BOTTOMED WITH A NEW CONTRACT LOW AT 348 3/4 on Nov. 16th and 17th before settling higher on the latter date.To repeat again, the 360 - 400 range remains a formidable looking resistance area that I don't expect to be penetrated any time soon. Soybeans and meal, led by the latter, have had a sharp rally over the last couple of weeks but, except for the dry weather in South America, I really don't know why since we still have s SUPPLY PROBLEM. Oil, on the other hand keeps dropping while being spread against the meal in favor of the latter obviously. Beans just had their best high and close since the end of July while meal since July 12th. A close for beans over 1040 and meal over 350 could go a long way in keeping this rally going. BUY SIGNALS FOR SOYBEANS AND SOYMEAL. SELL SIGNALS FOR MINNEAPOLIS, KANSAS CITY AND CHICAGO WHEAT ALONG WITH CORN AND OATS. For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 

 


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