Thanks to those of you who took the time to respond to our request for feedback on the Tech Guy.
After the big gains the past eight trading days, these CBOT markets have been due for a big correction every day this week. Yesterday morning, it looked like that correction was about kick-in as prices were smartly lower just ahead of a three-day weekend. But, it was not to be.
Some say Wednesday’s higher settlements were due to planting delays caused by wet weather in the Eastern Corn Belt and heavy snow in the Upper Midwest. Nope, not true. The corn market has proven year after year it does not care about planting delays until the middle of May. The low corn price for the year in 2019, the wet, very wet year, was on May 13th. That date is more than four weeks away. May corn matched a 14-year low at $3.01 on April 21st 2020.
The market knows most farmers can plant all their corn in 4.6 days.
The folks in the Upper Midwest have received the better part of two feet of snow the past 36 hours and they are quite happy to plant a couple weeks later in exchange for the moisture. Any market person who thinks corn and beans rallied because of late planting is reaching for an excuse.
CBOT prices were higher Wednesday because of inflation hedging, because Putin said Russia will continue the war in Ukraine until he gets what he wants and more technical buying. There is probably not one technical analysis system that says anything other than “BUY!” except yesterday’s Bullish Consensus reports with 74% and 82% of respondents bullish corn and 66% and 71% of respondents are bullish soybeans. Anything over 70% is overbought and is likely to soon run out of buyers. As you know, markets drop like a rock without buyers. If you have not read it, read the Joe Kennedy Story at: https://www.wrightonthemarket.com/post/the-joe-kennedy-story
Argentina’s truckers are on strike again, but this time it will hurt. Harvest has started and trucks move the soybeans to the crushers. Argentina exports more soybean meal and soy oil than any country in the world. The crush plant capacity currently is 42% idle and it will spike higher every day the truckers do not truck.
Bird flu news has been rather subdued, but we have had several folks tell us infections continue to spread slowly. Also, there are a lot of empty hog barns in Western Iowa due parvo-virus infections this past fall and winter.
The National Oilseed Processors Association (NOPA) is scheduled to release its monthly crush report on Friday, but maybe a day early this month (Good Friday). The trade expects 181.991 million bushels of beans were crushed in March. The range of estimates is 179.2 to 186.0 million.
The Gulf corn basis yesterday was one cent weaker for April and two cents weaker for March; soybean basis was unchanged to 2 cents firmer for April, unchanged to 4 cents firmer for May. Corn processors were firming their basis Wednesday and Eastern Corn Belt soybean crushers were doing the same.
Monday’s high in Omaha, Nebraska was 91 degrees F; Spearfish, South Dakota’s high was 19 degrees F.
Once again, this is the last trading day before a three-day weekend. Given human psychology and history, the chances of a sell-off today are highly likely in the CBOT ag commodities.
For those of you calving in the blizzard, our respect and prayers are with you. The world needs more people like you.
Broilers & Ethanol Update
Broiler egg set was up 1% than the same week a year ago.
Broiler egg hatch was up slightly than the same week a year ago.
Average daily ethanol production:
995,000 barrels last week.
1,003,000 barrels the previous week.
941,000 barrels the same week a year ago.
570,000 barrels the same week two years ago.
Ethanol inventory was 24.803 million barrels compared to 25.903 million barrels the previous week.
This morning: Crude oil is at $103.13, down $1.12 The dollar index is at 99.67, down 0.20 July palm oil is at 6,174 MYR, up 225. The contract high was made March, 9th at 6,531 MYR. Palm oil owns 36% and soybean oil owns 28% world market share. December cotton is at $123.62, up $1.44 per cwt. The contract high was made today at $124.36 per cwt. Cotton competes with soybeans and corn for acres. July natural gas is at $7.183, up 0.010. The contract high was made yesterday at $7.265. Natural gas is the primary cost to manufacture nitrogen fertilizer. July ULSD is at $3.3839 per gallon, down 0.0234. The contract high was made March, 9th at $3.7675. ULSD stands for Ultra Low Sulfur Diesel.
Rain Days Update
The Western Corn Belt has 7 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 2 more rain days than yesterday.