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LDP and harvest prices are hot topics

Agriculture.com Staff 02/09/2016 @ 3:59am

Corn Fundamentals: With wheats lead this week, add in strong weekly export sales and chart based traders ability to find the strength to penetrate this weeks stubborn 2490 technical resistance level, and that was enough to ask, are the harvest seasonal lows in and raise questions about the ability to secure LDP? Five of the most recent 8 years has found Dec corn futures at least trading at the same level which Sept futures expired at. Even in the fall of 2003, when projected global stocks to use were tight, Dec futures did trade at the Sept expire price of 2270. Sept futures 2006 expired at 2234. Dec futures closed Friday at 2552.

Wet weather is expected to stall harvest at least up to Tuesday, Wed of next week. Forecast are split for next week if additional rain will only provide a small open window of opportunity to resume harvest with any significance. As of this past Monday, corn harvest was said to be 9% complete vs 10% five yr ave. Five year history suggests the corn harvest advances to at least 18% by the last Monday for the month of Sept. Lets see how the balance of the weekend unfolds before submitting a harvest estimate in our 12:30 pm update on Mon.

Weekly Export Sales: as of the most recent official USDA export sales data, 537 mil bu of corn have been sold vs last years 332 mil bu (up 62%!) and most recent three year ave level of 339 mil bu (up 58%). It is this impressive front-loading of export demand which battles prospects of the USA's second largest corn crop ever and is able to borrow the needed support from the wet weather, causing harvest delays.

Corn Technicals: Dec futures close is 2552 vs last Friday's 2416, up 5.5% for the week and up 2.9% for the month. Our key custom Moving Averages are 2480, 2450 (support) and uses a 2580 bear to bull pivot point. March futures close is 2684 vs last Friday's 2554. Our key custom Moving Averages are 2610, 2590 (support) and its 2680 bear to bull pivot point cleared Thursday and Friday. We need to see a minimum of 2-3 consecutive closes above the 2680 level to confirm the bears are giving the lead to the bulls. July 2007 futures close is 2832 and its 50% retracement level is 2880.

Corn End Stocks to Use: Projected end stocks to use now at 10.2% vs 9.4% in 2003 for the domestic situation. Globally, a level of 11.5% vs 2003's 14.3%. Projected world end stocks for 2006-07 are now 92 MMT vs 103 in 2003. You need to travel back to 1983 to find smaller stocks of 89 MMT!

Cash Corn: It is the March-April time period when the National corn price average more often than not finds its calendar year peak price dating back to 1998. For the end user it is more often in the Oct-Nov time frame when prices reach low levels to lock in long term needs.

LDP: Both the 6 and 7 year LDP average peak for corn has been Oct 11th while soybeans finds its peak in a range of Oct 14th through the 27th.

The Immediate Trend is Up, change to sideways on a close Below 2490 As you are able to view, odds weigh on corn futures for next week based on the most recent ten year historical values as well as the four week total. Soybeans, soybean meal, CBOT and KCBT wheat, cattle and hogs HPT full description can be found within our Historical Price Trend page.

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