On this morning's grain stocks report, corn was given a slightly bullish number. Trade was looking for 1.911 billion bushel carryout and was given a number of 1.899. These 100 million additional bushels over last month came from a drop in "feed and residual" use. On the world stocks, we actually had a small increase of 144.2 million metric tonnes over the number from last month of 140.2. Between this increase in world stocks and the clearing off of the extended weather forecast, the early move slightly higher was short lived.
A major change in weather this morning came from taking out a first system that was supposed to hit the entire Midwest early next week. That is now calling to be just hit and miss showers with most staying in the far NE Midwest. Other than that change, the extended forecast also took out rains going out to the 15 day forecast. There is now a forecast for above average temps and below normal rainfall. It was hard for corn to manage a higher day due to this forecast change. What we need to remember is that in the last 3 days the extended forecast has been changed slightly 3 times.
We will have to accept the drier forecast for now but keep an eye out Monday for yet another possible change. In the end as long as the funds remain quiet, this market is stuck sideways. It is too early to be selling in case weather concerns do arise and it is hard to run it up with the large amount of hedgers selling just below 400. Along with weather, with spec money being silent, we can also expect the outside markets to cause little effect next week.
Planters are expected to be rolling on Monday with nearly all areas going by the middle of the week without rains. This forecast is anything but bullish; bounces should be soldâ€¦Ryan Ettner
Direction: For the short term, we will look for more sideways to lower trade. Both weather and the lack of spec buying will keep this market from moving much higher. On the other side, it is also unlikely it will be sold too aggressively do to potential weather issues down the road.
Working Trade (s): Â· (03/24) Bought July 380 call/sell July 440 call/sell July 340 put 4 1/2, risk to -4, objective 19. Closed -1 1/2.
Â· (04/05) Sold May 357, risk 365, objective 342. Closed 345 3/4.
***Disclaimer*** The commentary and trades below are derived from technical indicators provided in our Allendale Advanced Charts pages and may not correspond with the fundamental commentary above.
Advanced Charts Direction: May Corn traded higher and closed lower. Major support crosses at 343 1/2. If that support level is taken out, 325 would be next target. Major resistance would be this weekâ€™s high of 359 and as shown above downtrend line will cause resistanceâ€¦Paul Georgy
Vital Technical Indicator: the next projected major turn day is April 23.
Lean Hogs: The trade is still smarting from Smithfield closing its north central Iowa plant earlier than expected. That news is partially why USDA estimates this weekâ€™s kill will fall 5% vs. last year. In recent weeks it has been equal to last year. A constrained slaughter will help widen the spread between cash hogs and wholesale pork. Cash hogs and futures have languished for a few days while pork prices remain strong. This market will slowly recover after taking a couple more days to complete the adjustment. We are still supportive to futures for move into summer...Rich Nelson