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Strong bean price + slow planting=$4 corn

"We are done planting." That is what we are starting to hear from areas in south central IL and IN. With another week of dry weather forecasted those who are just starting or have been going for just a few days will get a chance for at least getting a good amount in the ground. In all, there are still very few complaints with how the spring is going.

This market found a good amount of support from the beans yesterday and it can be seen today. With the beans trading around even for most of the day, corn stepped back a couple cents. As long as corn does follow the bean market as much as it has you should keep a close eye on our bean commentary for signs of a turnaround. This market would likely break back down to our old sideways trend if beans loose some of the recently gained premium. There are some people we are talking with that are starting to be concerned with the possibility of turning too dry going into summer. Right now the extended forecast does call for going back to more average temperatures and precipitation. In fact the forecasters have suggested that the rain moving in next week will do well in restoring moisture that will be lost this week. Right now if we are to find support next week, it will not be coming from weather. It is still too early to talk about being too dry. We will also need to watch the planting progress report next week. Any number for planting progress will look bearish when compared to the 5 year average. On this morning's Grain Fundamentals 1 page we noted how the five year average will be 9% on Monday. The trade is talking of a 15%-25% number nationwide for this year. For next week, we need to see rain in the forecast, beans need to stay strong and somehow come away with a low planting pace number in order to get enough momentum to break 400. While this may be tough to accomplish we have also not seen aggressive selling so there is some support under this market as well. Some of that support is likely coming from the rising ethanol price as seen yesterday. Even given recent gains, this market is still range bound and it will take some big news or spec trading to break out of this range next week.

Direction: Next strong resistance is still seen at 400 the December. After checking with the floor once again, it was mentioned that 400 to 410 would see some aggressive selling. Planting pace will weigh on corn while ethanol and help from beans will add support to keep this market sideways…Ryan Ettner

Trade Recommendations:

· (04/16) Buy July 359, risk 349, objective 375.

Working Trades:

· (03/24) Bought July 380 call/sell July 440 call/sell July 340 put 4 1/2, risk to -4, objective 19. Closed 6 7/8.

· (04/05) Sold May 357, risk 365 filled 04/16 for -$400.

***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: Volume continued to dwindle in the corn market today, but the close was just shy of the moving averages. A close above these averages could propel the market up towards 376 very quickly. We were stopped out of our short at 365…Monica Moehring

Lean Hogs: Futures held their ground today and ended the week up $1.77 on the June contract. Through Thursday, cash pork ended $5.74 higher. Cash hogs, which stumbled a little the previous week, restarted their climb this week. The morning cash hog report for Iowa/Minnesota reported a strong $2.53 gain over yesterday. The reasons for this move are very clear. Hog slaughter during March was down 1% from year ago. Based on the recent Hogs and Pigs report we project hog slaughter would fall to 4% lower during the summer (aside from the Smithfield plant disruption). The pork export picture is looking better and US consumers may be ready to buy a little more meat.

Direction: We are still supportive to futures for move into summer. Target on the June contract is that $87 to $88 range. We will simply call it $87.50...Rich Nelson

Working Trades:
· (02/16) Sold May 68 put 1.32, risk 1.90, objective 0. Closed .10.
· (04/06) Sold June 80 put 1.30, risk 2.15, objective 0. Closed .80.
· (04/15) Bought June 86.00, risk 84.50, objective 88.10. Closed 86.62.

***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: Hogs posted a new contract high today and closed very near it. This keeps the bulls in control of the market, but the uptrend is still very steep and vulnerable to corrections. We have a buy order down at 83.75…Monica Moehring

Vital Technical Indicator: Next projected major turn day for lean hogs is April 27.

Rich Nelson
Director of Research
Allendale, Inc
4506 Prime Parkway
McHenry, IL 60050
800-262-7538

Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or adhere to a particular trading program in spite of trading losses are material points which can adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.

"We are done planting." That is what we are starting to hear from areas in south central IL and IN. With another week of dry weather forecasted those who are just starting or have been going for just a few days will get a chance for at least getting a good amount in the ground. In all, there are still very few complaints with how the spring is going.

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