At this time, Allendale new crop corn marketing recommendations stand at 25% hedged of your anticipated 2008 production. The December 2008 corn contract has key trend line support at 5500. It would take a drop in price down to 5124 to see traders shift their momentum to the down side. The immediate technical trend remains bullish. December corn futures closed at a new life of contract high of 5772 on Wednesday compared to the previous high of 5762, which was made on Monday. Allendale will monitor and alert you when to resume new crop hedges. Allendale projects fewer planted corn acres in 2008 than 2007, which may likely result in projected 2008/09 ending stocks of 617 million bushels, this compares to the present 2007/08 ending stocks for corn at 1.422 billion bushels.
Trade Posture: Allendale is fundamentally neutral to old crop corn futures as the decline in corn use for ethanol is likely to show up in the export column as long as the US dollar remains weak, which will keep ending stocks from building. For the short-term, we are willing to buy corrective dips based on a bullish short-term technical trend. Longer term Allendale remains bullish to old and new crop given our outlook for reduced corn plantings in the spring of 2008.
Allendale will hold hedges of new crop soybeans at 40% of anticipated 2008 production and alert when to resume new crop hedges. Allendale respects the higher trending new crop futures technically.
Trade Posture: Allendale is bullish to soybeans, soybean meal and soybean oil futures based on firm fundamentals and upward technical trends. As outlined within our Grain Trading Strategies page, Allendale is willing to buy soybeans, bought soybean oil on Wednesday and bought July soybean meal on Tuesday based on technical corrections. The key short-term Allendale custom Moving Average for May soybean oil is 6497.
The CBOT wheat futures trend is up. Resistance sits at 11320, while trend-line support rests at 9880. We see no reason to hedge new crop wheat above the 65% level we have on for now. Fundamentals remain supportive and the contract remains technically bullish. 8790 could be a bull to bear momentum price shift point.
Trade Posture: Technically the new crop wheat trend is up. Signs of economic rationing are apparent for old crop futures. There is less than 25% remaining of the old crop marketing year and we will likely see buyers shifting from old crop wheat to new crop wheat as we move ever closer to the new crop. Longer term, Allendale remains supportive to new crop wheat futures based on how weak the conditions were for the 2008 winter wheat crop as it went into dormancy last fall. Be aware of the media-press on March 12th as speculative trade could be shaken. This will be the day following the monthly supply and demand report and the day the American Bakers Association steps in front of the camera as they parade in our nation's capital. The bottom line is, world stocks of wheat are expected to remain tight until the Northern Hemisphere begins its new crop harvest. Allendale did enter long July futures positions at the MGEX and KCBT on Tuesday; we were stopped out of the MGEX on Wednesday.
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