May corn lost 9’4 cents this week to close at 639’6, its lowest weekly close since August 15th. The prior week’s meltdown continued through Tuesday morning when corn lost 59 cents and fell to 622 in less than six days of trading. May beans closed near unchanged on the week, down just a half-cent at 1518’6, but that contract was down 42 cents on the week by Tuesday morning before erasing all of its losses into Friday’s close. May spring wheat lost 9’6 cents and closed at 872’6. Similar to corn and beans, wheat featured early-week losses followed by a modest recovery. Wheat’s 860 low on Tuesday was its lowest since August.
The grains selloff extended through Tuesday morning before impressive recoveries to close out the week. Perhaps worth mentioning our Price Signals as wheat and corn had Buy Signals and beans Neutral when Tuesday’s recovery started. Anyhow, two fundamental stories managed to stabilize things. China showed up on Tuesday to buy corn for the first time in months. (This was fascinating to watch play out as immediately after that news, shuttle loaders started calling looking for corn offers.) And Argentine crop conditions slid even further. Now, only 2% of beans are rated Good/Excellent, and 67% are rated Poor/Very Poor. Not surprisingly, this combo of news provided excellent support for beans, solid support for corn, and left wheat still struggling a bit. Going forward, last week’s lows should hold leading up to March 31st for all three crops. All bets are off for corn after the March 31st Planting Intentions report, but leading up to it, those lows should hold. And likewise, the highs from the previous Tuesday are unlikely to be taken out. This gives us a well-defined range for the month of March, somewhat of a rarity, with moves toward the top of that range representing marketing opportunities.
CORN DAILY CONTINUOUS CHART: Prices held right at the December lows and immediately bounced sharply. Coupled with the triple top at 688, this sets up a well-defined range.
MAY 2013 CORN CHART: May 2013 corn with the aftermath of the planting intentions report highlighted. Corn lost 100 cents – literally a dollar lower – in two days following a bearish acres number. We think something similar could be in store this year as we expect the corn acres number to be huge.
SPRING WHEAT DAILY CONTINUOUS CHART: Spring wheat held support at the August lows this week, but if that gets taken out, it sets wheat up for another steep selloff.