Kleist Comments

MORNING GRAINS 2/19/14
MORNING GRAINS 2/19/14

Corn:

Exports: None Visible.

Comments: Argentina corn ‘favorable’; Brazil corn RGDS needs some rains, forecast for late week, Matto Grosso OK but rains could ‘disrupt harvest. I wanted to say something pithy about this but corn is not necessarily acting on its own volition. In my readings I actually found a report that a forecaster said he’s looking for a drought here in the U.S. and I’ll try to track the entire outlook down. But until then I can say this, since the weather cat is out of the bag,: IT IS POSSIBLE too much spring flooding will trash all plantings; too hot and dry will

shake & bake whatever gets in; and finally, an early frost will kill what remains. Guess in the end I could not resist the sarcasm but as per weather outlooks anyone can say anything especially if it’s bullish. And it usually does. Now that it’s out of my system, March corn on the verge of moving/closing over my near term likely bear defense of +$4.53. Open interest rose 4,900 even as March falls 24,500 amid good volume. Nearby support $4.44-4.38.

SOYBEANS:

Exports: None Visible.

Comments: Argentina corn ‘favorable’; Brazil corn RGDS needs some rains, forecast for late week, Matto Grosso OK but rains could ‘disrupt harvest. Even IF that crop size of 87.0mln.m/t’s from a farmer cooperative is correct (vs. 90-95.00mln. various others), is that enough for a new bull market? However, how can one fight that possible psychology AND a forecasters’ calling for a drought? I don’t “buy” either or all the arguments except one: big funds are bullish and money keeps pouring into the soybean complex (perhaps still coming out of financials). That’s why stops were invented. Hate to miss a move but it happens and one is wise not to turn tactical failure into strategic failure. So for now, what’s bullish is bullish and what’s bearish is bullish (i.e. NOPA crush).

Open interest rose 5,500 even as March falls 19,200 amid strong volume. In other news: AgCanada says canola plantings will increase 8% this year; China futures post lower beans but strongly higher soy and palm oil; open interest here in soyoil fell 3200 led by March off 16,140 amid heavy volume (crush lower but oil stocks higher was curious); and while here, soymeal open interest rose 5,700 led by May up 10,000 amid good volume. Nearby support $13.47-13.35-1/2. Oh, and NO China cancellations also cited as bullish.

Wheat:

Exports: None Visible.

Comments: Paris wheat futures quiet and shorts not in a knot over flooding in parts of Europe (specifically England), E.U. wheat said in ‘fair’ condition, but worried about middle west U.S. drought and cold moving in next week. AgCanada says will plant 6% less wheat this year; Russian gov. stocks up 12% on year, farmer holdings up 31% ; open interest fell 8,645 led by March off 18,700 amid strong volume. I am speculatively neutral now and will watch charts for awhile: nearby support $5.93-3/4-5.83-1/4 (major m/a’s); upside cold project to the 100-day at $6.36-3/4?.

Kleist Comments

This is John Kleist, of Kleist Ag Consulting.
Questions? Email me: johnwkleist@sbcglobal.net

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