Weather conditions pressure corn price
Allendale is registered with the CFTC and NFA and is a member of the NIBA. The bottom line is we are a regulated firm which can be extremely important in this day and age.
Corn Fundamentals: fundamentals are the investors perception of corn used for fuel and immediate weather developments. The fuel minded are doing its best to support futures while weather conditions are pressing futures.
Export Sales: Based on the sales thus far in the marketing year, Allendale's research suggest exports could reach 2 bil bu vs USDA's present estimate of 1.9 bil bu. Actual sales of 1.543 bil bu is greater than last years' 1.401 bil bu for the same week of the year but weaker than 2003/04's 1.586 bil bu for the same week of the year. Our research suggest export sales drop off perceptibly in late June-early July. This is important to know if you are planning on holding and selling cash grain.
Quarterly Corn Stocks: March 1 Quarterly corn stocks on and off farm of 6.987 bil bu suggest June 1 quarterly corn stocks could come in at 4.692 bil bu which would be 37% higher than the three yr average and 32% higher vs the five yr average for 3rd quarter stocks. Broiler Egg Set and Chicks Placed: a big surprise in last week's report. It appears as though those in the poultry sector are feeling the effects of a buildup of poultry meat and are now showing signs of backing off of filling the barns with new chicks. Egg set when compared to the same week one year earlier for the past two weeks is running 99%. Chicks placed at 97%, after a string of 99 to 100% placed. Of all soybean meal use, poultry consume 50% and 27.3% of corn use. Less chicks, less feed consumption.
Dec Corn Futures: new price projections have been released. Non Commercials influence of futures and ever increasing interest in ethanol production suggest a Dec futures high of 2800 nearterm and correction to 2200 before the summer season could take futures back up to 2800 with a high of 3000 under extreme conditions. Our fall low suggest a price of 2300.
Five Year Ave Cash Price: the five year ave cash price for corn for the month of April $2.14, month of May $2.14 and month of July $2.03.
Bean-Corn Ratio: the CBOT floor trade perception for corn acres to steal from soybean acres needs a bean-corn ratio of 2.19 to 1. At the close of business for the planting intentions report the ratio was 2.25 to 1. Friday's closing ratio was 2.23 to 1.
Corn Technicals: Two Fridays ago, July futures close 2484, todays futures close 2480. Our short term Moving Average indicators are 2490-2500 and 2460. Two weeks ago. Fridays Dec futures close 2684, todays futures close 2706. Our short term Moving Average indicators are 2700-2710 and 2670.
Trade Position: we are long old and new crop futures based on the technical drive higher of futures and funds increasing levels of interest in corn for ethanol.
Soybean Fundamentals: Brazil's soybean harvest is 75% complete. Export sales are noticeably sliding and bird flu is not helping. Domestic demand remains strong for cattle and hogs. Midwest farmers are not nearly as involved with soybean plantings as they focus on corn. Soil moisture is good and expected to stay as such leading into the early stages of the 206 planting season.