Grain Marketing Highlights – April 20, 2012

Carl German, Extension Crops Marketing Specialist;

Corn Analysis
U.S. corn planting was reported to be 17 percent complete as of April 15 as compared to 7 percent last week and 5 percent for the five year average. Corn posted double digit gains overnight due to rumored Chinese buying interest. The strong inverse in the May and July futures spread is indicative that the corn market remains bullish through the end of the current marketing year.

The weekly corn export sales report was slightly bullish. Pre-report export sales were estimated at 33.5 million bushels. The weekly report placed total export sales at 11.8 million bushels, below the 15.3 million bushels needed to stay on pace with USDA’s demand projection. Weekly shipments were well above the 34.7 million bushels needed this week.

Soybean Analysis
Soybean contracts also recorded double digit gains in overnight trade across the board. Long term fundamentals remain bullish with some pressure stemming from noncommercial long-liquidation. A slackening in contract spreads suggests some commercial selling has taken place.

Weekly export sales of 44.8 million bushels and shipments of 18.1 million bushels were well above that needed this week to stay on pace with USDA’s demand projection of 1.29 billion bushels. The soybean export sales report was bullish.

Wheat Analysis
Technically, the Chicago wheat market is in a position to establish a short-term uptrend, according to DTN analysts. Support stems from the corn market and the dollar. Fundamentally, the market remains long-term bearish.

Weekly exports of 16.2 million bushels were reported to be well above the 4.3 million bushels needed this week. Weekly shipments of 23.2 million bushels were below the 25 million bushels needed this week. This report should be viewed as neutral to slightly bullish.

Market Strategy
The extent of the current overnight rally may prove to be short lived, “buy the rumor – sell the fact”. Large portions of the Corn Belt received ample rainfall over the weekend, delaying field work in some places. Outside market forces will continue to impact these markets as we move forward. The Dow is currently at 13,026 with the U.S. dollar index at 79.5 . Currently, Dec ‘12 corn futures are trading at $5.42; Nov ‘12 soybeans at $13,55; with July SRW wheat at $6.27 per bushel.

For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.