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A bullish run: What's hot in this week's grain markets

  • 01

    It's been a week of some major crop numbers from USDA and a bullish response by the corn and soybean markets. Catch up on all the week's major markets stories here!

  • 02

    Since the March 31 USDA Planting Intentions/Quarterly Stocks Report, the corn market has taken on a new mentality. USDA reported fewer planned corn acres, but demand has also been running above USDA's expectations, according to Bryan Doherty, Stewart-Peterson market analyst.

  • 03

    As the U.S. farmers head to the field this April and May, the USDA has pegged the country's corn acres to be less than a year ago. Meanwhile, the March 31 USDA Annual Report has helped the market digest the new estimates of more soybean acres.

  • 04

    The new-crop corn price jumped above 50% retracement (black line in middle of chart) of last high. Since the last high of $5.80 (Spring 2013), the Dec. corn futures price fell below $4.40, then returned and broke through that same 50% Fibonacci retracement mark of 5.07. As of this week, the corn market has reversed, again, and fallen back below that 50% retracement level. The technical breakdown of the chart invites further selling by traders.

  • 05

    Since the March 31 USDA reports, the new-crop December corn futures market has seen a nice rally from $4.98 per bushel to a high of $5.11. Along with smaller acreage expected in 2014, increased demand and funds buying into the ag commodities space, the corn market has benefited. As of this week, prices have come off of those highs, with profit-taking setting in.

  • 06

    Since the March 31 Report, the soybean market has put on 38¢ onto the November futures contract. As of Thursday's close, the contract traded at $12.25. U.S. soybean supplies continue to dwindle, fund-buying, and smaller world crop estimates have helped the soybean market maintain a bullish stance.

  • 07

    Corn-to-Soybean Price Ratio favors Soybeans
    This chart shows a soybean-to-corn price ratio of 2.41. The ratio is used to gauge what commodity is more profitable for farmers to grow. The market considers a ratio of 2.23 to be neutral. Anything above 2.23 favors soybean plantings, and anything below 2.23 favors corn production. Each 0.10 of a point equals 50¢. Right now, the market is telling farmers to plant soybeans.

  • 08

    After hitting record-breaking levels in March because of the PEDV swine virus, the hog futures market dropped $12 per hundredweight to start this week. On March 31, a much anticipated USDA Hogs and Pigs report showing more hogs than expected started a spiral in April prices. A turnaround occurred Thursday, bringing the hog market back to the $122.00 per hundredweight. The price-driver remains the latest news on the PEDV virus and demand. This week, seasonal demand for Easter hams is supporting the hog market.

  • 09

    In a list of 40 commodities, tracked by Finviz.com, corn, soybean and hog futures markets are among the top-10 best performers in April. Soybean prices are up 5%, corn up 4.5%, and hogs up 7.8%.

  • 10

    Now that the March numbers are in the books (at 91.7 mln for corn and 81.5 mln for beans), a quick look at the March-June move. This chart shows that historically March to June USDA corn acreage, since 1990, only decreasing once in the last 11 years. Those ten increases averaged just over a million per year and the sharpest rise at 2.4 million acres.

  • 11

    For soybeans, this chart shows that historically March to June USDA acreage, plantings went up in four of the last five seasons, with those four averaging more than 1.25 million acres per year.

Some key USDA numbers were just one big driver of a bullish week in the grain markets. See what's been hot in the trade this week.

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