Last week I mentioned the old saw about the dead cat — that even a dead cat can bounce a little. That was in response to the idea that the market had gone so low, a little bounce did not mean anything. The bounce has now lasted for a week, and I am forced to admit that there might be a little life in the old bag of fur.
A look at the charts shows good gains in the spring grains, and the slowed wheat harvest is contributing to a bottom finally being found on the wheat charts.
Rain in the Plains has stopped the hard wheat harvest, and bought with it talk of declining test weight levels. This is particularly critical because elevators carried a lot of low TW wheat in from last year, looking to blend it out.
The Chicago wheat has not been as volatile as the hard wheat markets, since harvest is still a couple of weeks away, even in this early year. Still, the July contract finally but in a bottom after a month of mostly lower prices. The low was June 9, at 4.25-1/2.
The bounce had us to 4.54-3/4 for a moment on Monday. (4.54—a nice point of reference for all you big-block Chevy fans, even if GM wants everyone to say “Chevrolet” now.)
The rains in the Midwest have stopped soybean planting, which is of some concern. The crop is at 91 percent planted, which is just above the normal 90. However, little progress is being made, and it is getting late.
The soybeans have worse problems than late planting. The outside markets we have been looking at are limiting exports.
Again this week we failed to move offshore what we needed to meet the USDA calculations of demand. This time it was 7.4 million bushels instead of the 9.9 mb pace we need for the rest of the marketing year. The crush has also been disappointing.
Still, beans managed to jump 16 cents at one point Monday, and corn was up a nickel at one point. The what was up almost 11 cents. In this case the fundamentals did not overcome the easing of outside market issues.
The dollar was down, crude was up, and the Dow traded both sides before going down 20 points. For Monday, this overcame the fact that corn exports are also lagging. It also overcame the fact that the market anticipated improved crop conditions in the Monday afternoon report.
The market was wrong, as USDA says the crop is not as good this week as last. That may come to play in the Tuesday market, although we were down fractionally in the overnight trading. The move up may have been a knee-jerk reaction to the official confirmation of the rumor of a sale to China last week.
120,000 metric tons is not a huge sale, but it is to China, where the rumor mill gets the most bang for its buck. For the week, corn gained a 19-1/2-cent bounce off the low, July beans had a nearly 33-cent bounce to the Monday high, and wheat bounced nearly 30 cents to the Monday high.
Let’s see if we can keep the bounce going!.