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Weekly Crop Comments

 

Price

Change

US Dollar

83.14

+1.03

Crude

95.85

+0.39

Dow

15,118

+145

Cotton was up, wheat and corn were down, and soybeans were mixed for the week. The US dollar increased 1.03, crude oil was up 0.39 for the week, and the Dow set new highs during the week closing over the 15,000 mark at 15,118. The higher U.S. dollar had a negative impact on commodity markets. Overall economic news was neutral to bearish for agricultural commodities this week. The World Agriculture Supply and Demand Estimates (WASDE) report was released Friday May 10, 2013. Overall the report was neutral to bearish for commodities; complete commentary on the report will be posted on the Monday May 13, 2013 on the UT Crop Economics website. Weather continues to drive market fluctuation, however, planting has been progressing in key corn states and one should look for Monday’s Crop Progress report for further detail.

Corn:
Nearby:

Corn

Price
$/bushel

Change

July

6.36

-0.25

Support

6.13

-0.39

Resistance

6.60

-0.11

Technical

Strong Sell

-

20 Day MA

6.37

+0.02

50 Day MA

6.59

-0.03

100 Day MA

6.79

-0.05

Weekly exports met expectations with net sales of 11.2 million bushels (4.5 million bushels for the 2012/13 marketing year and 6.7 million bushels for the 2013/14 year). A slow sales pace continues for old crop corn with the most current 4-weeks of sales 65% below the 5-year average. Ethanol production decreased 14,000 barrels per day to 843,000 barrels per day. May futures closed at $6.87 for the end of the week.

New Crop:

Corn

Price
$/bushel

Change

September

5.54

-0.25

Support

5.36

-0.37

Resistance

5.73

-0.15

Technical

Strong Sell

-

20 Day MA

5.63

-0.02

50 Day MA

5.71

-0.02

100 Day MA

5.87

-0.05

Corn planted as of May 5th was reported at 12% compared to 5% last week, 69% last year and a 5-year average of 47%. Planted acres were slightly below expectations; however improved 5 to 15 day weather forecasts in key corn producing states have held corn prices lower. Corn emerged was 3% compared to 2% last week, 29% last year and 15% for the 5-year average. Currently producers should consider having a minimum of 25% of the 2013 crop priced and look for any future rallies to move up to 30% priced or to the level that crop insurance won’t cover. From a price risk management standpoint, a $5.60 September Put Option costing 39 cents would set a $5.21 futures floor.

Soybeans:
Nearby:

Soybeans

Price
$/bushel

Change

July

13.99

+0.12

Support

13.73

+0.15

Resistance

14.32

+0.18

Technical

Buy

+

20 Day MA

13.79

+0.05

50 Day MA

13.94

-0.04

100 Day MA

14.05

-0.03

Old crop soybean supplies continue to remain tight, May-July future soybean spreads of 89 cents are at their highest levels since 1974. Weekly exports were within expectations with net sales of 21.5 million bushels (7.1 million bushels for 2012/13 and 14.4 million bushels for 2013/14). Bird flu deaths in China increased to 32 and continue to reflect the spread of this disease. Soybean crops in central Argentina are some of the biggest in the country’s history however on the edges of the grain belt are not nearly as large. South America in general has had an above average crop.

New Crop:

Soybeans

Price
$/bushel

Change

November

12.05

-0.16

Support

11.81

-0.13

Resistance

12.36

-0.02

Technical

Sell

-

20 Day MA

12.11

-0.06

50 Day MA

12.38

-0.05

100 Day MA

12.66

-0.06

Soybean planting has commenced with May 5th  estimates of 2% compared to 22% last year and a five year average of 12%. Corn planting delays should continue to be watched carefully as if delays continue into the later part of May acreage might shift from corn to soybeans. Pricing 20% of 2013 production should be co nsidered. Producers should look at any rallies as an opportunity to increase the level priced. Downside protection could be achieved by purchasing a $12.20 November Put Option which would cost 73 cents and set an $11.47 futures floor.

Wheat:
Nearby:

Wheat

Price
$/bushel

Change

July

7.04

-0.17

Support

6.88

-0.17

Resistance

7.32

-0.10

Technical

Sell

-

7.09

7.09

=

50 Day MA

7.09

-0.01

100 Day MA

7.41

-0.07

Weekly exports were above analyst expectations at net sales of 17.1 million bushels (8.8 million bushels for 2012/13 and 8.3 million bushels for 2013/14). May futures closed at $6.96. Cooler temperatures in the southern states this spring have resulted in delays in wheat heading. Nationwide, winter wheat heading as of May 5 was reported at 20% compared to 14% last week, 64% last year and the 5-year average of 39%. Crop condition ratings for winter wheat as of May 5 were 32% good to excellent compared to 33% last week and 63% last year. Poor to very poor ratings were 39% compared to 35% last week and 12% last year. Results from the Kansas Wheat Tour ran the entire spectrum of quality from frost damaged to waterlogged to drought parched to good or excellent condition. Overall average yields were estimated at 41 bushel s per acre.

New Crop:

Wheat

Price
$/bushel

Change

September

7.12

-0.18

+0.08

6.96

-0.19

+0.01

7.39

-0.12

+0.14

Sell

-

20 Day MA

7.17

=

50 Day MA

7.17

=

100 Day MA

7.50

-0.07

Spring wheat planting reported May 5 was at 23% compared to 12% last week, 82% last year and the 5-year average of 50%. The northern plains and Canadian prairies continue to experience planting delays due to inclement weather. Currently producers should consider having 25% of the 2013 crop priced and look to move that up to 30 to 35%. A $7.20 September Put Option would cost 45 cents and set a $6.75 futures floor.

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