Charts of the Day – August 10, 2020

Corn
Soybeans
Chicago Wheat

Afternoon Market Commentary – August 10, 2020

by: Chris Betz

Corn Soybean Wheat
Old Crop (futures month, change, settle price) CU0 2’6 310’4 SU0 4’2 870’0 WU0 4’4 491’0
New Crop (futures month, change, settle price) CZ0 2’2 323’0 SX0 5’6 873’2 WN1 4’4 517’0

Mixed bag coming out of the weekend with corn up a couple cents, beans up around a nickel, and Chicago wheat down just under a nickel.

Corn and beans were up despite storms making their way across the Midwest, with more in forecasts for the belt during the week. Crop conditions released this afternoon should be steady around 72% good to excellent. Gains for corn and beans also come ahead of the next WASDE report due out on Wednesday, which could have bearish supply estimates for both. Although, gains were consolidative having taken back some of Friday’s losses. Chicago wheat was dragged lower by other classes as conditions are good for spring wheat, and harvest has progressed well domestically as well as abroad.

September corn did tick a new contract low at 307’4, which is support. Resistance is the 20 day at 320’4 with the key 100 day above there at 331’2. Key support on the continuous chart remains the 300 level then the 2008 low at 290. December corn held support at the contract low at 320. Resistance is the 20 day at 330’0 with the 100 day above there at 340’4.

November beans made a modest bounce off support at 866’6 and the 100 day at 869’4. Resistance is the 50 day at 882’6 then the 20 day at 888’2 with key 200 day a leg higher at 904’4.

September Chicago wheat continues to fall under pressure. Support is the contract low at 471. Resistance is back at the 500 mark then the 50 day at 511’6.

Technical Thoughts – July 30, 2020

By: Ken Lake

Today USDA announced the third-largest single week corn sale in history yet corn could only eke out a meager 2 cent improvement.  The overriding concern is that we China purchases are not on pace for being able to abide by the Phase 1 trade deal.  September corn traded to 315.25 both yesterday and today just a quarter-cent above the contract low of 315.  This market is incredibly weak.  All moving averages are pointing lower and short term moving averages are poised to cross into a bearish signal.  A close below 315 sets us up for a move to 300.  December corn is trading 5 cents off its contract low at 322 and is showing weakness as short term moving averages are trying to cross into bearish territory.  Sales are not recommended here.

Spot soybean values have moved to the November futures so we will only concentrate on that contract from now on.  Weakness has been displayed this week but the overall technical outlook is still somewhat friendly.  Support is 878 and resistance 893.  We still maintain an upside target of 907, the 200-day moving average to advance sales.  Even though 907 will likely not achieve the sales value most producers want, they should consider the recent CFAP and past MFP payments have a direct negative effect on price and will likely have to settle for somewhat lower value at the farm gate.

Support in September wheat is 523, resistance is 536.  We are trading sideways on a lack of news related to wheat.  Futures carry is minimal.  End users have coverage, some for the entire year.  There is no reason to carry wheat either on farm or in dp.

Robert’s Thoughts – March 26, 2020

By: Robert Geers

Last week I mentioned that the country elevator was turning to the things they know and that is a market without ethanol.  We continue to see ethanol plants across the US shut down, reduce hours, or take extended maintenance shut downs.  While this is all happening the country elevator is still open, receiving grain, shipping grain, and finding feed and export markets for grain.  We are also preparing equipment and filling storage space with nutrient and chemistry products for the upcoming agronomy season and we will be ready.

It is also important that as the ethanol markets work through this challenging time that we be patient and understanding of the situation they are in.  As we are asked/ordered to social distance or stay home to reduce the spread of COVID-19 and the stress it could put on our health care system, we will drive significantly less.  In the coming weeks we could see miles driven down anywhere from 25-50%, the ethanol market did not ask for that but they are doing what they need to do to survive what should be a temporary situation.

At MAC we feel fortunate to work in agriculture, an essential industry and will continue to serve the needs of our customers, while protecting the health of customers, our employees, friends, families and communities.  If you have any questions or concerns please reach out to us. We’re here to help.

Fertilizer Update – January 6, 2020

By: John Ezinga

Thoughts in the new year by product:
The charts below represent 10 year time frames of the corn price relationship with each product.

  • Red= HOLD or caution before buying
  • Yellow = NEUTRAL
  • Green= BUY!

As you can see from the long term urea affordability index chart above it is clearly in what I call the buy zone as the price per pound of N as compared to corn is under 10%. If you need urea it would be smart to get it bought now. We are 70 bucks off the highs from last spring and seem to have found a bottom in the paper markets. I expect prices to improve from here. Although I do not expect them to rally significantly I do expect them to rebound 20-40 going into spring application season.

The chart below on 28% shows a buy signal as well. I hear there are a lot of import tons working through the system so there may be deals to be had if there is some desperation amongst the traditional holders of 28% at this time of year. In either case the price is not going to hurt you at these levels and likely will look pretty smart in the spring.

PHOSPHATE

Obviously this chart (Phosphate affordability index) is pointing to a year in which you should be clearly building your soil P levels. We are at 10 year lows and this product should be bought. I expect that like urea this product has found a bottom and will rebound so do not drag your feet to get coverage here if you need it.

POTASH

Potash is not as clear-cut as N and P. It is hovering on a neutral rating on my affordability index vs corn. I think that the Potash cartel is in control of their pricing and supply and so therefore tips the scale into a buy rating from me. If it does set back, I would expect it to be very modest.

Other products:

10-34-00
I expect flat pricing here forward with a spike right in the demand season.

AMS
We are awash in AMS…buy as you need.

SOP
If you were not aware, MAC Middleton is warehousing Sulfate of Potash and organic SOP too!! Call for pricing.

Gypsum (ag grade)
If you have gypsum in your normal spreading program you will find that prices have moved up 15-25 bucks a ton since last year. The driving culprit is the temporary closure of mines in Alabaster, MI. US Gypsum is working thru some expansion problems with the DNR and will be out of supply for the next 2 years or so. We have synthetic gyp available.

ATS
Supply should be very adequate

NH3
With lack of fall usage there should be good supply for spring application.

Contact us for specific products you would like to quote or be updated on.