USDA Crop Report

News & commentary on the USDA Crop Report and Grain Futures markets including wheat, soybeans, corn & more

USDA Crop Report is a blog dedicated to bringing updates, news and commentary on the USDA Crop Report and the grain futures markets including wheat, corn, soybeans and more.

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December Corn may be Trying to Bottom

Posted on 7/30/2015 4:33:18 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

On Wednesday December corn made a new high above the previous day but ended up closing below the previous day's low.  This is an outside reversal down day and is seen as a strong technical sell signal.  However, on Thursday corn did make a new recent low but then proceeded to rally to close 5 1/2 cents higher on the day.  This is some pretty typical bottoming activity for corn.  Can corn manage to put in a low at this point?

The outside sweeping reversal down day on Wednesday is often considered a strong sell signal by technicians.  Sometimes however, the sell signal never sees and significant follow through and reverses higher, this is called a bear trap.  Corn has a history of doing this right before a rally.  We saw similar activity in early June right before corn rallied almost 90 cents by early July.  We also have a couple examples of this from back in 2012 right before corn rallied to new highs (if you go back far enough in my posts you will see I wrote about it at that time). 

This does not mean that corn will go higher from here, and it certainly does not mean that we can rally like it was 2012.  This is a very different situation and the fact of the matter is that corn has had a lot of sell signals in short order, so most technical traders will still be leaning lower.

From a fundamental standpoint, corn may have rallied too high on the "too wet" concerns and needed a correction when weather concerns and crop conditions started to stabilize.  This happened to come at a time when commodities as a whole were under pressure as a strong US$ and global economic concerns caused large speculators to want to shed some risk.  Now, however corn may have gotten too cheep again.  There has been damage done by excessive rains in some areas and despite some very good corn in the North and Western corn belt the national average yield has likely taken a hit.  This may not have been a big issue in a year where we planted 94 million corn acres, but in a year were we struggled to plant 89 million (lowest since 2010) this has a big impact.

On August 12 the USDA will give us their monthly World Agricultural Supply and Demand Estimates (WASDE) and in this report they will have their first survey based yield estimates of the year.  This is significant because the USDA to this point has stuck with the trend-line yield of 166.8 on all of their balance sheets so far despite obvious damage caused by excessive rains.  This could mean that the trade will be looking for some rather bullish numbers on the WASDE report which could cause some short covering and/or speculative buying in the weeks leading up to the report.

Does a 1 day reversal off the lows in corn mean that the low is in for now?  No, not necessarily.  In fact, in most circumstances we would expect corn to find significant selling pressure on any strength after a sell signal like we saw on Wednesday.  However, with the August WASDE report coming up and ideas of smaller yields and tighter balance sheets a day like to day could be what many would be corn buyers were looking for.  It will be very interesting to see how corn trades in the first half of August.

Please give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action.  Ted Seifried - (312) 277-0113.  Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.  Follow me on twitter @thetedspread if you like. 

Dec Corn Daily chart:

 

Nov Soybeans Daily chart:

 

Dec Wheat Daily chart:

 

Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


December Corn Is Trying to Bottom

Posted on 7/30/2015 4:31:50 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

On Wednesday December corn made a new high above the previous day but ended up closing below the previous day's low.  This is an outside reversal down day and is seen as a strong technical sell signal.  However, on Thursday corn did make a new recent low but then proceeded to rally to close 5 1/2 cents higher on the day.  This is some pretty typical bottoming activity for corn.  Can corn manage to put in a low at this point?

The outside sweeping reversal down day on Wednesday is often considered a strong sell signal by technicians.  Sometimes however, the sell signal never sees and significant follow through and reverses higher, this is called a bear trap.  Corn has a history of doing this right before a rally.  We saw similar activity in early June right before corn rallied almost 90 cents by early July.  We also have a couple examples of this from back in 2012 right before corn rallied to new highs (if you go back far enough in my posts you will see I wrote about it at that time). 

This does not mean that corn will go higher from here, and it certainly does not mean that we can rally like it was 2012.  This is a very different situation and the fact of the matter is that corn has had a lot of sell signals in short order, so most technical traders will still be leaning lower.

From a fundamental standpoint, corn may have rallied too high on the "too wet" concerns and needed a correction when weather concerns and crop conditions started to stabilize.  This happened to come at a time when commodities as a whole were under pressure as a strong US$ and global economic concerns caused large speculators to want to shed some risk.  Now, however corn may have gotten too cheep again.  There has been damage done by excessive rains in some areas and despite some very good corn in the North and Western corn belt the national average yield has likely taken a hit.  This may not have been a big issue in a year where we planted 94 million corn acres, but in a year were we struggled to plant 89 million (lowest since 2010) this has a big impact.

On August 12 the USDA will give us their monthly World Agricultural Supply and Demand Estimates (WASDE) and in this report they will have their first survey based yield estimates of the year.  This is significant because the USDA to this point has stuck with the trend-line yield of 166.8 on all of their balance sheets so far despite obvious damage caused by excessive rains.  This could mean that the trade will be looking for some rather bullish numbers on the WASDE report which could cause some short covering and/or speculative buying in the weeks leading up to the report.

Does a 1 day reversal off the lows in corn mean that the low is in for now?  No, not necessarily.  In fact, in most circumstances we would expect corn to find significant selling pressure on any strength after a sell signal like we saw on Wednesday.  However, with the August WASDE report coming up and ideas of smaller yields and tighter balance sheets a day like to day could be what many would be corn buyers were looking for.  It will be very interesting to see how corn trades in the first half of August.

Please give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action.  Ted Seifried - (312) 277-0113.  Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.  Follow me on twitter @thetedspread if you like. 

Dec Corn Daily chart:

 

Nov Soybeans Daily chart:

 

Dec Wheat Daily chart:

 

Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


November Soybeans Close Below Key Support, But...

Posted on 7/30/2015 4:08:32 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

Soybeans have been under pressure recently as weather has become less concerning.  November soybeans managed to close below the key $9.90 level today giving many traders a technical sell signal.  However, soybean spreads continued to represent strong upfront demand and soybean production is far from final.  Is this recent break of key technical support the start of a new leg lower in soybeans?

November soybeans are now almost 65 cents off of highs.  Better weather forecasts and stabilizing soybean conditions have soothed the production concerns that had fueled the sharp rally off of lows.  Going forward weather continues to look nearly ideal for soybean development as we get closer to the crucial pod set stage of development.  The speculative crowd that had been buying on a weather market are now looking to take profits.

However, going forward soybean production is not yet out of the woods.  Soybeans continue to be firmly entrenched in a weather market and will continue to be until late August as many fields are behind.  There also remains an other question swirling around soybean production aside form yield - acreage.  The USDA said it will re-survey 4 states for planted acreage and produce the results on the August 12th WASDE report.  This uncertainty could offer some support to the market.

Another potentially supportive factor in the market is the relative strength in the August soybean contract.  There is not even a third of the volume in the August soybeans compared to the November contract however the August contract continues to be supportive. This could be suggesting that commercials are aggressively buying cash soybeans on this break and could be suggesting that cash demand for soybeans remains very strong.

While weather and weather forecasts have gotten better and soybeans have let some steam out of the recent rally, the story may not be over.  Going forward the trade will continue to monitor weather forecasts and crop conditions and any concern could turn soybeans quickly.  And, this August 12th USDA WASDE report will address questions on yield and acreage and bullish expectations could support soybeans going into that report.  So, the close below key support is negative in the near term, but soybeans could still find support as we get closer to the August USDA WASDE.

Please give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action.  Ted Seifried - (312) 277-0113.  Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.  Follow me on twitter @thetedspread if you like. 

Dec Corn Daily chart:

 

Nov Soybeans Daily chart:

 

Dec Wheat Daily chart:

 

Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


07/29/2015 Corn and wheat have sell signals

Posted on 7/29/2015 1:49:18 PM by: Larry Baer, Market Strategist @ Zaner. 312-277-0112.

Call me for trade



BULLISH:WORST LOOKING WHEAT CROP (SOFT) IN 17 YEARS IN MANY AREAS:BEARISH:6 MONTHS SUPPLY

Posted on 7/29/2015 6:33:13 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

WE HAVE A VERY GOOD HEDGING DEPARTMENT HEADED BY TED SEIFRIED. WHY NOT TALK TO HIM OR ANY OF OUR OTHER HEDGING BROKERS. NO ONE WILL PRESSURE YOU AND WHAT HAVE YOU GOT TO LOSE?  I'VE BEEN A LICENSED FUTURES BROKER FOR OVER 41 YEARS AND TRUST NO ONE MORE THAN TED AND HIS GROUP.

 

 

Higher closes for oats, rough rice, corn, soybeans, soybean meal and soybean oil along with Minneapolis, Kansas City and Chicago wheat. Now the grains are in tricky areas to call but the directions are not!  Minneapolis wheat has now fallen thirteen out of its last sixteen sessions KC sixteen out of nineteen and Chicago fourteen out of nineteen. The bullish news is that the former two had reversal type action, some areas are showing the worst looking soft wheat crop in seventeen years at this time and all are in support areas to varying degrees. Then again to counter this, the wheat has around a six months supply in storage and I'm not even counting problems in China, etc. In other words continue to sell rallies with help from your broker and even better, our highly experienced hedge department, I mentioned a few weeks ago that the wheat complex chart formations looked dangerous for a nice size correction. Naturally, I could have been wrong and I have many times before in my forty- one plus years, but that's no excuse not to get some 'expert' advice from any source you so desire to verify my opinion(s). I know that I keep stating the obvious that,as farmers, you are always long the cash grains unless protected. I did miss by not giving sell signals for the wheat complex though, so you see. I'm not infallible. I continue to foresee the wheat complex working lower overall but more hedging chances should pop up along the way albeit at probably lower price levels than before. On Monday oats made a new CONTRACT LOW AND CLOSE just not looking good and should be sold on rallies around 250 and 265. However, a long term stop should be a close over three dollars. A closer stop is tough for me to come up with looking at all that resistance above. Now rice is another story. If you are looking for one bullish market in the grain complex, then rice would be it..You can see, by looking at the chart below, that rice has been consolidating over the last three weeks. Although its trend has been up since the middle of last May, you can use a close above 1120 or below 1080 for a further direction from here. Corn has fallen sharply over the last couple of weeks (down 7 out of its last 11 sessions) but now resides in a strong looking support area. Also, closing below the four dollar is not considered good but with less planting and in good support, I wouldn't sell now even though I'm removing my buy signal. Our hedge department did call a rally up to around 450 which it got and now that corn is back down below four dollars it's a tough call at this time. Still, this is not a bad price area to protect part of your crops if your cost basis justifies it in my humble opinion. Either way, you can't really go wrong doing some hedging if the price is right for you.The beans really needed to hold the ten dollar level which it did not and does have some support nearby but I still expect them to fall further into harvest unless a substantial drought comes along. The world supply remains ample and our dollar remains too high in my opinion.  On the other side of the coin meal has held up much better than oil overall and that should give the beans some support unless the former continues to drop hard. Meanwhile, on Monday oil made it its worst close since Jan. 30th pretty much telling its story. Now we just continue to watch the weather forecasters attempting to do their jobs accurately. BUY SIGNAL FOR ROUGH RICE. SELL SIGNALS FOR OATS. SOYBEANS, SOYMEAL AND SOYOIL. For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.


BULLISH:WORST LOOKING WHEAT CROP (SOFT) IN 17 YEARS IN MANY AREAS:BEARISH:6 MONTHS SUPPLY

Posted on 7/29/2015 6:33:06 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

WE HAVE A VERY GOOD HEDGING DEPARTMENT HEADED BY TED SEIFRIED. WHY NOT TALK TO HIM OR ANY OF OUR OTHER HEDGING BROKERS. NO ONE WILL PRESSURE YOU AND WHAT HAVE YOU GOT TO LOSE?  I'VE BEEN A LICENSED FUTURES BROKER FOR OVER 41 YEARS AND TRUST NO ONE MORE THAN TED AND HIS GROUP.

 

 

Higher closes for oats, rough rice, corn, soybeans, soybean meal and soybean oil along with Minneapolis, Kansas City and Chicago wheat. Now the grains are in tricky areas to call but the directions are not!  Minneapolis wheat has now fallen thirteen out of its last sixteen sessions KC sixteen out of nineteen and Chicago fourteen out of nineteen. The bullish news is that the former two had reversal type action, some areas are showing the worst looking soft wheat crop in seventeen years at this time and all are in support areas to varying degrees. Then again to counter this, the wheat has around a six months supply in storage and I'm not even counting problems in China, etc. In other words continue to sell rallies with help from your broker and even better, our highly experienced hedge department, I mentioned a few weeks ago that the wheat complex chart formations looked dangerous for a nice size correction. Naturally, I could have been wrong and I have many times before in my forty- one plus years, but that's no excuse not to get some 'expert' advice from any source you so desire to verify my opinion(s). I know that I keep stating the obvious that,as farmers, you are always long the cash grains unless protected. I did miss by not giving sell signals for the wheat complex though, so you see. I'm not infallible. I continue to foresee the wheat complex working lower overall but more hedging chances should pop up along the way albeit at probably lower price levels than before. On Monday oats made a new CONTRACT LOW AND CLOSE just not looking good and should be sold on rallies around 250 and 265. However, a long term stop should be a close over three dollars. A closer stop is tough for me to come up with looking at all that resistance above. Now rice is another story. If you are looking for one bullish market in the grain complex, then rice would be it..You can see, by looking at the chart below, that rice has been consolidating over the last three weeks. Although its trend has been up since the middle of last May, you can use a close above 1120 or below 1080 for a further direction from here. Corn has fallen sharply over the last couple of weeks (down 7 out of its last 11 sessions) but now resides in a strong looking support area. Also, closing below the four dollar is not considered good but with less planting and in good support, I wouldn't sell now even though I'm removing my buy signal. Our hedge department did call a rally up to around 450 which it got and now that corn is back down below four dollars it's a tough call at this time. Still, this is not a bad price area to protect part of your crops if your cost basis justifies it in my humble opinion. Either way, you can't really go wrong doing some hedging if the price is right for you.The beans really needed to hold the ten dollar level which it did not and does have some support nearby but I still expect them to fall further into harvest unless a substantial drought comes along. The world supply remains ample and our dollar remains too high in my opinion.  On the other side of the coin meal has held up much better than oil overall and that should give the beans some support unless the former continues to drop hard. Meanwhile, on Monday oil made it its worst close since Jan. 30th pretty much telling its story. Now we just continue to watch the weather forecasters attempting to do their jobs accurately. BUY SIGNAL FOR ROUGH RICE. SELL SIGNALS FOR OATS. SOYBEANS, SOYMEAL AND SOYOIL. For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.


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