For the monthly chart trader, Wednesday April 30th's close was technically damaging, only to the wheat futures at all three exchanges. KCBT, MGEX and CBOT wheat futures have had two consecutive lower monthly closes as well as lower lows and lower highs. See the table at the end of this report.
Soybean Fundamentals: Argentina's Chief of Staff may have resigned. As of this writing extreme mixed signals are coming from Argentina. The range of ideas has the farmers returning to strike on Friday May 2nd to potentially delaying a return to strike on May 20th. One of the key four Farm Groups has suggested progress is made regarding wheat exports, but a stalemate regarding the sensitive topic of the sliding tax scale on soybean exports. The soybean to corn spread (new crop) reached a ratio of 1.9 to 1 on Tuesday suggesting farmers may stretch to try and add corn acres versus soybeans. On Wednesday the ratio widened to a level of 1.95. Allendale suggests the pivot point for the ratio is 2.1 to 2.2. Those regions with cold, wet soils and water ponding may have little economic choice other than to plant soybeans.
Wheat Fundamentals: Two hot topics for wheat on Wednesday; they are forecast for beneficial rains for the southwest Southern Plains, which are in dire need of rain and a report of leaf rust found in Kansas, untreated with fungicide could trim yield by as much as 40%. There is healing taking place with world suppliers in 2008, but the wound is not completely healthy. Closer to home, US wheat conditions are below average and suggest a two tier pricing system but on a cash basis. The southwest southern Plains are in need of rain. The differential in good to excellent conditions this year versus last year for a few select states are as follows; CO down 48%, TX down 48%, OK down 15% but KS up 6%.
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