Charts of the Day – October 21, 2019

Corn
Soybeans
Chicago Wheat

Afternoon Market Commentary – October 21, 2019

by: Chris Betz

Corn Soybean Wheat
Old Crop (futures month, change, settle price) CZ9 3’6 387’2 SX9 0’6 933’2 WZ9 8’6 523’4
New Crop (futures month, change, settle price) CZ0 1’2 409’0 SX0 0’4 973’2 WN0 6’2 537’6

Drier extended forecasts for areas outside of the northern midwest lent pressure Monday. Nationally, harvest will have made good progress last week, which should continue this week. The northern midwest will still have to contend with excessive moisture, however, as well as freeze in spots.

Brazilian planting is catching up to an average pace, which will have also weighed on trade early this week. AgRural said 21% of the Brazilian soybean crop has been planted.

News on the trade front was limited, but indications are still that a mini deal has been agreed at least in principal between the U.S. and China that will include further Chinese purchases of U.S. Ag products.

December corn closed on support at the 20 day moving average at 387’2. Next support is around 380. Key resistance remains the 200 day moving average at 401’4, then the 100 day at 407’0.

November beans have retreated some from key resistance around 945, but are still holding most of recent gains. Support is the 20 day at 917, then the 200 day at 910’2, with the 100 day below that at 898’2.

Chicago wheat fell back from fresh three month highs set early in the session. On the Dec, that high is resistance at 535. Support is back at the 100 and 200 day moving averages at 503’2, and 503’4.

Fertilizer Update – October 17, 2019

By: Emily Calderone

As we progress farther into the harvest season, the next thing on our minds is usually fall applications of Potash and phosphates, or getting nitrogen on our freshly planted wheat crop. Although I’m sure fertilizer prices aren’t as low as we wish they were (are they ever?), overall, most fertilizers actually aren’t a bad buy relative to commodity prices.

 

Phosphates: 

MAP and DAP are at a very favorable place right now. Prices started trending lower after fall 2018, when supply started piling up on retailers and producers when Midwest growers couldn’t get into the fields for their usual fall applications. We saw that price dropping continue all through the 2019 growing season as well – after a tough spring, many have been slightly more timid to lock in supply without seeing what yields and grain prices would be in the fall. Even with the closing of a phosphate mine in Florida, prices on dry phosphates have stayed low. If fall applications pick up, prices may start to move back up, but I would still expect them to stay lower than what we saw last fall, and are a good buy. 10-34-00 is a little bit of a tighter market and prices usually cycle along with demand – if you’re looking to secure some, prices are lower than what we see in the spring and likely won’t see any big drops through the winter as farmers start to get their orders set for spring. 


Potassium:
 

Potash has been fairly quiet through the 2019 growing season. Prices were trending upward through last fall and winter, and even a little into spring, but after the “summer Potash fill program”  was released and over, prices didn’t see much upward movement and eventually fell to last years lows. Potash doesn’t typically make fast or large price jumps, only about $5 per ton at a time, but with producers talking about closing mines to reduce supply and fall application season happening, I wouldn’t be surprised to see a slight uptick as fall presses on. 

Nitrogen: 

28% and the summer fill (or lack thereof) has been the biggest topic in fertilizer in 2019 so far. One of the largest domestic producers of liquid nitrogen limited their offered tons during the time period where most farmers and retailers stock up, and the offered prices were much higher than what were expected. Although summer may not have been the deal we hoped for, prices moving through fall are much more favorable than they were last year – last fall, 28% was upwards of $250/ton, and average pricing through the Midwest is closer to $225/ton as we enter into harvest. Urea also tells a better story, prices at New Orleans, a major port for fertilizer barges, have been dropping and domestic prices are finally starting to follow. Urea prices are also much more favorable entering fall 2019 than what they were as we trudged through 2018. Anhydrous has been kind of the odd duck as nitrogen prices have been tracking – although it is still the most cost effective option per pound of N, prices were very stagnant through most of the summer and we have finally started to see some movement as fall starts moving. While anhydrous is finally tracking down and is considered a favorable buy, it seems like many that use or store NH3 are hoping to see that downward tracking continue before locking in. 

Technical Thoughts – October 10, 2019

By: Ken Lake

We saw a mixed USDA report today.  It was negative corn but positive for soybeans and somewhat negative for wheat.  The initial market reaction was for corn to trade 10 lower and soybeans 10 higher with wheat down 2 cents.  I am writing this just 15 minutes after the report but my sense is that lower corn values will not flush much corn into the market, therefore, basis levels will remain firm if not improve.  The soybean market will quickly turn to weather in the upper Midwest in the next couple days as a freeze threatens, and to Washington DC as Chinese trade talks are being held.

This move puts December corn in a corrective (lower) mode.  Support is 380.  The 20 and 50 day moving averages were pointing to a bullish cross at 379.  If 379/380 holds then good support will be offered there.  If we break 379 then we have downside risk to 352.

November soybeans have long-term support at the 200 day moving average, 910.  Fundamentals now support higher values unless trade talks with China fail again.  This market is 75 cents per bushel off its lows which gives us a chance to catch-up sales.  Producers needing coverage should sell something here.

December wheat was over-bought but is correcting lower today.  Similar to soybeans, wheat values are up more than 40 cents per bushel from their preharvest lows.  Catch-up sales are warranted.

July 2020 wheat, like the December contract is correcting the over-bought condition but still offers a good hedging opportunity.  Producers should sell some 2020 production here.

Opening Calls – December 3, 2018 at 7:12 AM

Beans are up double digits after Saturday’s announcement that the U.S. and China have reached a trade truce, and either side will not levy additional tariffs on the other. More work needs to be done to reach a firm resolution to the trade dispute, but the tone should be much more positive moving forward. Beans were up as much as 29 cents at the open of the overnight session Sunday, and currently up 16 ½ cents. Corn and wheat tagging along with corn up 4 ¼ and wheat up 5 ¼.