All Eyes on U.S. Planting Pace

Corn bounced off of the chart support area Friday helped out by early bean strength and noon weather maps, which were not quite as clear as seen yesterday. Morning weather maps did not offer a large amount of rain, but the noon run did add some rains for Missouri, Kansas, and parts of Nebraska again. Trade will once again react much more to the Monday map updates than to anything seen today. While there seemed to be limited concern this week about the planting pace, we could see support on Monday as trade gets a bit more concerned right before seeing the actual number Monday afternoon.

Let’s remember that this week was supposed to be one of the two most active planting weeks for spring. To keep pace with the five-year average, we would need to see 18% more of the corn planted on Monday. While trade may not seem very concerned about meeting that pace on a Friday, we could see a change of opinion to start next week.

By the end of the day July picked a very middle of the road price, which seems fitting given that trade is likely just not sure what to expect from planting pace this week. Short-term, let’s expect trade to react to Monday’s weather maps as well as pretrade what they will expect for planting pace. We also can expect some pretrading of Wednesday’s Supply/Demand report. Analysts are not expecting a shocking report but given that it will offer the first new crop estimates, there could be a reaction if that number is off from the expected 2.120 number.

Bulls

  • There is reason to be concerned about this week’s planting pace number on Monday given that meeting the 18% normal pace could be difficult.
  • Bulls can continue to expect support in the mid-360s unless Wednesday’s report offers a shockingly large carryout number.
  • There is a possibility that USDA could raise its ethanol demand number on Wednesday given the continued strong weekly reports.

Bears

  • Bears will be looking for a highly productive weekend of planting in order to keep planting pace at the five-year average.
  • Wednesday’s new crop carryout number has the ability to truly surprise trade; bears will obviously be looking for a high starting yield number.
  • Bears should look to sell any bounce into the 370s again looking for the active resistance to be seen at the same levels again.
     

Rich Nelson | Allendale Inc. | 815-578-6161

This material has been prepared by a sales or trading employee or agent of Allendale Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Allendale’s Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.
 
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