Corn stocks to drop to '86 lows
Allendale: has released its estimates for 2008/09 corn, soybean and wheat production as well as 2007/08 and 2008/09 new crops stocks both domestically and globally. The highlight of the estimates is how old crop stocks of corn are expected to fall from 1.332 billion bushels to a level of 481 million bushels for the 2008/09 marketing year. 481 million bushel end stocks are at lows not experienced since 1995/96.
Historical Price Trends: best odds for the week of May 05, according to our HPT page is for CME June Hogs and CBOT July Soybean Meal. Over the most recent ten years, odds of 80% for higher CME June Hog futures than where they closed on Friday of the present week. Over the most recent ten years, odds of 70% for higher futures for July Soybean Meal than where they closed on Friday of the present week. Please see the HPT page for the complete list.
For The Week: for the week, May corn futures value increased 4%, May soybean futures value decreased 3% and July CBOT SRWW value decreased by 1%.
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. A detailed technical look at the grains and livestock are available within our Allendale Advanced Charts.
Conclusion: July corn, as well as CBOT, MGEX and KCBT, are likely to use its # MA as immediate support. A breech of #2 MA for July corn may induce increased levels of selling pressure.
Corn Planting: pre release trade estimates for Mondays planting progress is 27-30% vs 10% last Monday, 53% last year and a five year average of 59%. NASS actual results suggest 10% of the corn crop has been planted as of Sunday, April 27th. The most recent year when only 10% of the corn crop was planted for that week of the calendar year was 1995. The six to ten day and two week NWS forecast normal precip for the greater Midwest and yet cooler than ave temps for the extreme north central Midwest.
Corn Fundamentals: all eyes are on the late pace of planting and weather forecast. The trade is also aware of a strengthening US dollar which may press exports but also realize, few acres of corn planted in 2008 vs 2007, suggest there is good support for futures. Since 2004, USDA has raised corn acres planted in the June Planted acreage report vs the March Prospective acreage report an ave of 1.481 million acres with a range of 179,000 to a maximum of 2.434 million.
Exports: corn exports account for 19% of the total 2007/08 use. with 18 weeks remaining in the marketing year, cumulative sales of 2.212 billion bushels to all nations are 22% higher than year earlier levels and 31% higher than the five year average. Based on the past 4 weeks ave weekly sales the US is on pace to sell 2.482 bil bu vs USDA target of 2.5 bil bu. Shipments of 1.659 billion bushels are 16% higher than year earlier levels and 61% below the five year average.