Heartland Farm Partners Closing Market Comments Apr 20, 2017
Today’s Prices
Grain prices started out the day trading a little bit higher but for the second day in a row fund selling and chart based selling stepped in to pressure prices.
Grain News
4” Morning Soil Temperature
This map shows soil temperature at a 4 inch depth at 7am this morning. You can see soil temperatures still in the 40’s from extreme northern NE, through northern IA, WI, MN, and the Dakota’s where temperatures are actually in the lower 40’s in the Dakota’s and a good portion of MN. This area from northern NE, northern IA, and WI northward is likely to see very slow planting progress at this time. But temperatures into the mid 50’s and even 60’s in the far southern belt, KS, MO, and southern IL.
7-Day Observed Precipitation
When we look at the precipitation that’s fallen over the last week you can see about 1 -2 inches of rain across much of the northern and northwestern portions of the belt. Keep in mind, soil temperatures from extreme northern NE, northern IA, WI, and northward has cool soil temperatures and quite a bit of rain so very little planting is likely taking place in that part of the country. We also had an inch of rain across most of IA, into parts of the western corn belt and planting in these areas is probably relatively limited as well. But in the far western belt, parts of central/southern NE into KS and also parts of MO, southern IL, southern IN, and parts of southern OH are the two areas that are likely seeing some pretty good planting taking place and that would include parts of the Delta as well. These areas have seen very little rain for the most part over the last week.
7-Day Precipitation Forecast
The heaviest precipitation looks to fall from KS, OK, through MO, AK, and into the southern portions of the eastern belt and the OH Valley. The good news, some of these areas from central MO, southern IL, southern IN are areas likely getting quite a bit of planting done at this time. That would include portions of the Delta as well. At least they’re getting something done ahead of these big rains. Rains in the northern belt from IA, NE, MN, and SD do look lighter but again keep in mind they’ve had more rain recently so temperatures are much cool so this area could still be somewhat slow and could show very little progress in Monday’s weekly report.
NWS Long Lead Forecast for May-Jun-Jul
This map show precipitation outlook for the May-Jun-Jul timeframe. In general, temperatures above normal across almost the entire U.S. corn and bean belt. The exception would be the far northern Plains, specifically ND. Precipitation looks mostly normal across the U.S. corn belt with a chance of below normal precipitation in the Great Lakes region and maybe a little above normal across the Rockies and far western Plains. Overall this forecast not showing any serious threats. Keep in mind this forecast is 30 – 90 days out and just a longer-term forecast. At this time, the NWS indicating the bigger weather pattern no indicating any major risk. We will want to watch to see what kind of heat develops as we enter into the growing season.
Grain News
Corn: Weekly Export Sales
Sales this week came in just a little above last week at 756,000 tons. That’s a good number and was within the range of expectations. Do note the blue line, last years exports sales. We had huge sales last year in the Apr-Jun timeframe. We’re not likely to come anywhere close to those totals on a regular basis this year. Also worth noting, the level needed to reach USDA’s export forecast is only 323,000 per week. So we are running well above the level needed and it’s still appears we’ll be able to reach USDA’s current export forecast, if not coming in a little higher.
Soybeans: Weekly Export Sales
Somewhat of a disappointing number at 211,000 tons. We’re declining seasonally so that shouldn’t be a surprise and we’re right in the middle of the range for this time of year. Even though today’s number was somewhat disappointing at the lowest level going back to Jan and the second lowest week of the marketing week, keep in mind we’ve already reached USDA’s total commitment. Therefore, we could average a negative sales total for the rest of the year and still reach USDA’s export forecast. Now we will have some weeks that show cancellation and we’ll also have some of this year’s sales that get rolled over into the next marketing year. But nonetheless, total commitment for soybeans is running ahead of the pace needed to reach USDA’s current export forecast.
Wheat: Weekly Export Sales
Wheat sales a pretty good number at 414,000 tons. That was near the upper end of the range. Keep in mind, that total is one of the best totals we’ve seen for this week of the year over the last 7 years. That’s been the case over the last 5 weeks. Even though we’re not getting huge numbers, they are very good for this time of the year. We’re still at a pace that looks like we could surpass USDA’s export total.
May Corn Chart
Corn prices very disappointing after closing above our 40-day moving average and having an outside day and pushing into a new high late last week. This week corn prices have slipped lower and give back almost all of last week’s gains. That leaves the $3.54 - $3.55 level the current support. That’s our upward trend line that’s been in place god back to the pre-harvest timeframe and also where we had some lows posted back in March. Today’s trade was very disappointing for the bulls push back toward the lows. Overall, we still believe the $3.50 level presents an area where we want to be a buyer of corn and then rallies towards the upper end of the range at the $3.80 - $3.85 range would be an area where we’d be a seller of corn. After pushing up toward the middle of the range over the last few weeks, we’re now pushing toward the lower end of the range. We do believe this is an area you’d want to be a buyer of corn rather than a seller.
May Soybean Chart
Similar situation in beans where we rallied most of last week but we’ve given back some of those gains this week. Beans still look like they want to trend higher on the charts be we’re not seeing much of a push to the upside, in fact, a lower close today. Technical indicators chopping now back and forth right in the middle of a neutral range. The combination of charts moving lower this week and technicals chopping in a sideways range tells us this market may be stuck at least for the moment in a consolidation area with chart support at $9.30, overhead resistance at $9.60 and today’s close around the $9.40 level. We’re right in the middle of that range that’s been established over the last three weeks.
May KC Wheat Chart
Wheat prices very disappointing. Prices not only closed lower and sharply lower for the day but we took out the previous lows from over the last few weeks in the $4.14 - $4.15 range. We also took out the lows established back in Dec. Those were the contract lows and surged down to a new low of $4.02. So a very disappointing day in the wheat market. We believe wheat will see some very choppy trade. We want to keep in mind the funds are holding a near all-time record large short position in the wheat market. The market does have the potential to see some bounces and some fairly sharp bounces from time to time if we could get a little friendly news. Right now there’s not much in friendly news but we are watching the conditions in western and southern Europe and the Canadian Prairie. In Europe, it’s too warm and dry. In the Canadian Prairie, it’s too cool and wet. Therefore we’re not sellers at current levels. We’re going to be patient. We do believe we’ll see rallies that will present much better selling opportunities in the months to come.