It was surprising to read from an Iowa State Extension Agronomist, "farmers need not be nervous as there are three weeks or so to finish planting corn without incurring yield loss. It's better to wait until conditions are right, rather than mudding in the corn." Be aware, private and public weather forecasters are mixed it next weeks forecast. The majority agrees that cooler temps are expected for most all of next week, but there are those calling for the window of opportunity to open to make good planting progress.
Dating back to 2000, odds favor a national cash corn peak for the months of April and May. Given the present timing consideration as First Notice Day is April 30th, and futures are holding well despite seasonal pressure, Allendale sold its remaining 2007 inventory on Wednesday April 23rd, which is hedged in the May futures, rather than roll to the July. We have chosen not to re-own inventory via futures and or options at present. Allendale continues to hold 30% of the 2007 corn harvest in inventory and will alert when to move to the cash market.
Long term, Allendale remains bullish to old and new crop corn as a result of declining US stocks, old and new. New crop acres to be planted may result in 480-520 million bushels of 2008/09 ending stocks under average conditions. Our Monday research study suggests with present planting delays, 219 million bushels may not be far away for 2008/09 marketing year for corn, what do you think? Allendale presently is long the 590 July corn call. Based on a recent study we looked at with regards to planting delays, a price swing of $1 per bushel may not be out of the question.
Negotiations have cooled in Argentina between its farmers and their government. Latest discussions now suggest that the balance is leaning more towards the four main farm groups to return to its striking ways beginning May 2nd. Farm Groups are displeased with the government's idea to leave grain trade in the hands of five multinational corporations. The longer negotiations take place and before a May 2 deadline to return on strike continues to favor above normal demand for Brazil and US supplies.
For new crop soybean marketing, we will hold hedges of new crop at 40% of anticipated
2008 production and alert when to resume. A move to 13150 may warrant additional hedging. The technical trend line chart support is 12270. The intermediate trend is bullish.
The trade remains focused on Argentina strike developments, perception of strong vegoil demand from India and China, and corn plantings delays, potentially injecting more 2008 soybean acres. Stocks of USA soybeans remain tight.
Taking a look at wheat, the India Farm Minster says 2008 wheat crop is big enough, no need for wheat imports. Ukraine re-opens exports of grains. Australia is off to a good 2008 wheat-planting season with showers on the way for HRWW in the southern Plains. Kazakhstan suggests it is willing to work for a greater market share of Iran wheat needs.
Even though present US winter wheat crop conditions are less than average, globally the crop is healing (not fully healed by any stretch of the imagination) in the right direction, with larger 2008 volume compared to 2007. Technical indicators are bearish and are the dominant force at present for wheat futures. At this juncture Allendale is willing to sell corrective rallies via call options.
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