Grain Market Chatter Closing Comments 01/14/2015

Craig’s Closing Grain Market Comments

January 14, 2015

In this price environment having an understanding of the market and how to create a marketing plan to respond to it may be very important.  I will be putting on marketing meetings this winter in an attempt to help you with these decisions.  The schedule for this week is as follows:

January 15^th – Herreid Community Center at 11 a.m.

January 15^th – Hague at the Amvets at 2 p.m.

Corn:

If we are looking for a villain to blame for today’s lower corn price I would like to nominate Salman bin Abdulaziz Al Saud, the crown prince of Saudi Arabia.  The thought of oil prices falling and Saudi Arabia continuing to pump oil coupled with today’s announcement that ethanol stocks were up 7.34% over last week and a whopping 25.82% over last year conjured up visions of slowing demand.  That coupled with the thought that we have a large carry-out was all it took to bring in another round of selling for the session. 

Technically, all three of my technical indicators are now bearish.  It is worth noting that the 100 day moving average is sitting at $3.77 ½ basis the March futures.  A close below that level may open up the door for a move as low as $3.30.

Soybean:

I am going to be lazy and just hit you with some bullet points.

• USDA is estimating the Brazilian crop at 95.5 MMT, up from last year’s record crop of 86.7 MMT last year.
• Rumors of soybean export cancellations.
• We get the December NOPA crush estimates tomorrow and are looking for them to be in the 164 to 166 million bushels range.
• Today’s higher close was at least in part the result of some profit taking after the beating the market has recently received.

As a result of today’s close all three of my indicators are bearish.  We traded through $10 today but closed above it.  Longer term I would not be surprised to see the October 2014 lows challenged.

Wheat:

We are seeing lower prices offered out of the EU and the Black Sea region and that coupled with slower demand pressured wheat today.  It appears that for the time being the trade is not overly concerned about weather problems and as that risk premium comes out of the market look for prices to slide as well.

All three of my technical indicators are currently bearish both the Minneapolis and Kansas City March futures.  As noted on the following chart, we did close below the 100 day moving average today.  That is never a good sign.  I would expect the Minneapolis March futures to trade to $5.74 and if that levels fails to hold we could see a test of $5.40.