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Corn market bullishness

Agriculture.com Staff 05/21/2008 @ 11:30am

Historical Price Trends: best odds for the week of May 19, according to our HPT page is for CME July Hogs. Over the most recent ten years, odds of 90% for lower CME July Hog futures than where they closed on Friday of the previous week by an average of 225 points. Please see the HPT page for the complete list.

For The Week: for the week, July corn futures value decreased 6%, July soybean futures value increased 1% and July CBOT SRWW value decreased by 4%.

For The Month: Thus far for the month of May, July corn futures value is down 3.5%, July soybean futures value increased 4.9% and July CBOT SRWW value decreased by 3.3%.

Technicals: For the short term trader, Allendale uses its own unique custom Moving Averages to monitor price momentum, define key support and resistance levels as well as advise where key pivot points are located when bulls may turn bearish and bears to turn bulls. We also include last weeks closing price for the weekly chartist as we draw closer to the end of the week to anticipate the possibility for futures to have a positive weekly close or if weakness is ensuing.

Farm Bill: Highlights of the House and Senate Farm Bill are found within our Grain Fundamentals II page. Congress has passed the most recent version of a new farm bill which has overriding powers of a veto by President Bush. Interestingly enough the proposed farm bill has language which "require electronic energy traders to provide an audit trail and record-keeping, monitor for market manipulation, and increase financial penalties for cases of market manipulation and excessive speculation."

Weather: private weather services suggest an available open window for planting of corn and soybeans for the next five days. The region forecasted is the Delta, through Missouri, Kansas, southwest Iowa and up through the Dakotas. A similar forecast for the east cornbelt but for later next week.

Corn Fundamentals: the trade suggest its transitioning from planting progress to emergence. Read next section below. Fundamentally futures should be well supported by slow emergence and steady demand. Weather patterns may be shifting from a steady stream of rains to something more sporadic and allowing for better chance for planting progress. Floor traders suggest corn plantings to be at a level of 75% planted vs a five year average of 88% when NASS releases its update at 3 pm on Monday. We view weather as supportive to futures but realize corrective breaks are possible.

Corn Emergence: the trade suggest it is transitioning its focus more heavily on corn emergence and less weight on the corn planting progress. If it is the case, then the corn trade needs to be supportive to futures. The May 11th corn emergence level is estimated at 11%. Dating back to 1999, the highest percentage of emergence was 51 in the year 2000 with a five year average level of 33% and ten year average of 32%. Typically for this present week emergence usually gains 23% suggesting by NASS's next release 11% could become 34%. However historical research suggest by next Sunday, corn emergence typically is 56%, none the less, still very much delayed.

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