Sitting, staring at my ergonomic keyboard this Tuesday morning. Another Tuesday, another struggle to make sense of this market.
Maybe I could just talk about how my carpal tunnel symptoms went away when I used the Microsoft ergonomic, then the Logitech ergonomic keyboards. Are there endorsement dollars to be had?
Is the medical opinion of a grain columnist valuable to the advertisers?
I hope my grain opinion is valuable this morning, but I am not sure I have one. I have not been bullish, even though I have wanted to be. I want there to be a reason for $4 corn, and I want to be the hero that buys it, but I haven’t seen it in the tea leaves, and I don’t have the heart to stir the chicken entrails this morning.
Too close to breakfast.
The corn market is dominated by the fact that we are looking at nearly two billion bushels of carryout at the end of the summer, by the fact that the ethanol plants are running faster than they want and producing more than they want and at a loss, and by the fact that the technicals are no better than the fundamentals.
Look at the technical. We have had four significant highs since harvest, and each has been lower. On Oct. 14, the May corn futures were $4.03-1⁄2. On Dec. 7 we touched $3.87-3⁄4. On Feb. 4, we touched $3.78-1⁄4. And, on Feb. 22, we got up to $3.73-1⁄2.
Those numbers define a bearish market. Connect the dots and you have a line of overhead resistance, and we are trading well below it. We got down to the new low, then we have struggled to get off it.
Up and down
A couple of good days, a couple of bad days, and here we are at $3.57-1⁄2 this morning. We are three cents above the recent low, although we made a shot at higher prices Monday, when we got to a high of $3.62-1⁄4, then traded lower into the close of $3.59.
Coming are two fundamental reports from USDA. Wednesday we got the March Supply and Demand Report. March 31, we get the annual Prospective Planting Report. Sadly, there is little hope in either.
If there was, the market would have already traded higher in anticipation. The best fundamental news came Monday, with continued good exports.
We had $37.52 million bushels shipped offshore last week, which was above the expectations of the trade. It was, however, below the exports of 46.5 million bushels of this time last year.
Soybeans led the markets Monday, after a big day up the previous Friday. On Friday, the May soybean futures were up 14-3⁄4 cents, the biggest day in a long time. We added to those gains Monday by being around 9 cents higher, but closed only up three and three quarters cents.
In the process, we posted a high of $8.87-1⁄2, which was 31-1⁄2 cents above the recent low on March 2. Sadly, we are only trading $8.79 currently, sown almost three cents for the day and eight and a half cents off the Monday high.
That $8.87-1⁄2 high gives us the fourth time we have gotten near the $8.90 mark for a high. Every time we get there and back off we have created stronger overhead resistance as far as technical analysis goes.
Each time we create a greater need for big news to break it. The biggest chance for that news probably comes with a March 31 Planting Intentions Report that is disappointing for bean acres. This is not to say that will happen, but that we should look for that as a reason for higher prices.
The growing realization of a bigger-than anticipated and bigger record crop in Brazil currently is the big negative in this market. We have been fighting that off. Current ideas that they will once again have what is becoming an annual truck drivers’ strike is helping stave off the negative of the big crop. Last year the strike disrupted shipments for two weeks. We can only hope the drivers get even more stubborn this year.
Wheat prices have been defensive as we have focused on unseasonably warm and dry weather in the Plains. This week we are shifting to wetter weather, although that can be good for the long run.
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