Charts of the Day – March 15, 2024

Corn
Soybeans
Chicago Wheat

Market Commentary – March 15, 2024

by: Chris Betz

Corn Soybean Wheat
Old Crop (futures month, change, settle price) CK4 3’0 436’6 SK4 3’0 1198’2 WK4 3’6 528’4
New Crop (futures month, change, settle price) CZ4 3’0 470’6 SX4 3’6 1190’6 WN4 3’2 544’0

Technical Thoughts – March 14, 2024

By: Ken Lake

The charts below are 4-hour time periods that depict the recent turn higher in corn and soybeans. The red rectangles highlight 1-week periods that represent the CFTC Commitment of Traders reports. Note the turn on the corn charts on Feb 26 and on the soybean charts on Feb 29. Those dates mark the end of farmer pricing or rolling March basis contracts. Once the producer long was cleared the path of least resistance turned up.

Upside targets, however, are taken from the daily charts simply because using signals from intraday charts come too quickly for our purposes.

May contract upside targets are 448, 460, 472, 513. There is moving average resistance at 446, 471, 500. Caution is advised against getting too bullish however as there is significant farmer ownership looking for a sale. Use 435 as a sell stop.

December corn targets are 474, 483, 486, 499, 498. There is moving average resistance at 473, 491, 503. Sell stops should be 467.

Remember, there is a USDA prospective planting report due out on March 29th. There is risk that we do not see a significant enough reduction is US corn acres which may result in a sell-off into the end of the month exacerbated by the recent run up in values.

May soybean contract upside targets are 1198, 1242, 1277. There is moving average resistance at 1201, 1278, 1304. There is a chart gap between 1306 and 1300. Set sell stops at 1172.

November soybean contract upside targets are 1221 with moving average resistance at 1226, 1240. There is a chart gap between 1244 and 1237. Set sell stops at 1163, 1172.

Wheat has given us little to be hopeful for, however, both old and new crop wheat made fresh bullish 10/20-period crosses on March 11th which has been nearly erased in the last two sessions. New contract lows for both contracts were scored this week.

Fertilizer Update – September 15, 2023

By: John Ezinga

The calm before the storm!
Harvest is coming fast!

Energy
I have been updating some of my ratio charts on the energy side and have included it below. Energy is a key factor for farm profitability.

From Diesel to run and NAT Gas to dry we all need energy to be productive. Energy is also a very good indicator of inflation and instantly shows changes in supply and demand and how they relate to money supply.

Below is a Nat Gas vs Corn ratio and a propane vs corn ratio. They are signaling a buy of your energy needs for drying this years harvest.

 

Here is crude oil vs corn ratio.  As you can see this relationship has moved against you as crude has increased at the same time as corn is finding its harvest lows.

Do we have “free markets” in energy?
Most of you have heard about the SPR(strategic petroleum reserve)  being depleted to get us thru recent high prices but we don’t often think about how the decision to hold prices artificially low will reflect over the longer run.

When SPR is used to “try” and keep a lid on inflation the market signal of “PRICE” is muted. Oil producers do not get the signal to increase production until the government steps out and lets price discovery signals talk.  A good analogy is a beach ball being held under water…..eventually it finds equilibrium and likely shoots straight up once the “true” demand/Supply relationship is realized.

See below….we have taken 350 million barrels out of the spare tank for immediate use in one year. To put this in perspective, the USA, produces just over 10 million barrels per day. I think you will see a sharp increase in energy prices in the next 12-24 months as the beach ball hits the surface. Government intervention into markets will not end well for the consumer.

The real question should be what market is truly a “free market”?
Serious question…..please reply with your thoughts….

You can directly correlate energy use to human advancement. I say drill it, pipe it, plant it, and mine it wherever and whenever you economically can!

Thankfully, the United states can print oil. Yes, I said it correctly. Thru the privilege of having the world reserve currency we can print oil. This privilege does not come free. It is paid for thru inflation of our currency. Although we are the slowest sinking ship….we still run the risk of abusing our currency privilege if we over print. See excerpt from article on inflation I wrote in 2022 for more details.

Talk to your supplier on your energy needs…..you do not want to be buying when the beach ball is popping up to the surface….
Energy is life.

Back to CORN and Fertilizer

As corn prices have recently pushed towards what might be the “harvest low” most farmers quit answering their phones and fertilizer salesmen may as well have taken the month off. No one wants to talk about anything!!

Look at the average rebound in corn price noted below….(.h/t Ken lake for this graph)

Are you prepared to sell the harvest rally? Markets likely have driven corn lower than it needs to go and the  rebound will be short lived in my opinion.

Even a war in the breadbasket of Eurasia can’t seem to put a bid into the grain markets…….until it does?

Russia/Ukraine has conditioned the markets with continued spotty escalations and missile strikes and then sells off. Big crops get bigger…….

Here are the current corn ratio charts:

28%
CF has moved UAN up $65/ton since the summer fill. At the same time corn has dropped nearly 50 cents. Summer fill was a no brainer….today it is neutral. You can still buy 50 ton load for under $350/ton delivered.

Urea
Urea pipeline is completely empty coming out of spring. I had to truck urea from damn near Nebraska to finish side dress season!

I think the price is way over done…be patient and I think you will have better buying opportunities. Currently in the mid $500’s/ton.

Phosphate
Look at the chart and then guess what year phosphate companies got tariff protection proposed…..LOL

Remember…..It is an election year and the politicians would love to see a price drop in food costs….are you prepared to help them achieve this?

Current pricing is still in the mid $700/ton range.

Potash
Potash is fairly priced right now for fall application. If your soil maps are calling for an application I would not short it.

Potash fall pricing is $425-450.