Corn
No major surprises in the USDA’s March 1 prospective planting and quarterly stocks reports that were released on March 31, 2014. Quarterly corn stocks came in at 7.0 billion bushels, 93 million bushel less than the average trade guess, but within the pre-report range. Planted acres were projected at 91.7 million acres, 1.0 million acres less than the average trade estimate, but still within the pre-report range.
The corn quarterly stocks was the most anticipated of all the reports for a couple of reasons. One, it can be used to calculate the number of bushels of corn fed to livestock for the first half of the marketing year after subtracting off exports and corn used in Ethanol. And two, the trade was worried that USDA may have under counted those first quarter corn stocks and/or overestimated feed use and those bushels would show up in the March 1 stocks report. Apparently, at least for now, feed use should remain unchanged at 5.3 billion bushels or increased 100 million bushels in future supply and demand reports.
Corn acres at 91.7 million would project ending stocks for 2014-15 at 1.6 billion bushels or less. At this level, the season average price would be in the $4.25 – $4.50 price range. However, we must keep in mind that the acres can still vary 1- 2 million depending upon spring planting weather. If acres are up 1 million to 92.7 million acres, ending stocks would grow to 1.8 billion bushels or more, and the season average price would be closer to $4.00.
Technically, initial price support in the May futures is at $4.90 and the next support levels are at $4.80 and $4.70 at the major moving averages. If prices can hold $4.90, then a retest of $5.12 or higher is possible. For old crop corn, I would recommend making some sales. For December 2014 futures, initial support is at $4.95 and the next support level is at $4.85. The price resistance levels are at $5.06, $5.34 and $5.80. Future price rallies will be more a factor of planting weather. If you are under 50% sold, I would recommend getting to this level over the next few weeks.
Soybeans
Soybean quarterly stocks came in at 992 million bushels, just 3 million bushels over the average trade guess. This may result in ending stocks being cut 10 million bushels to 135 million bushels. Planted acres were projected at 81.5 million acres, up 5 million acres from last year and 400,000 acres above the trade guess. At 81.5 million acres, ending stocks for 2014-15 could easily jump to 280 – 300 million bushels. The season average price could fall into the $10.00 – $10.50 price range. If acres are increased one million to 82.5 million acres, ending stocks could be in the 300 – 340 million bushel range. The season average price would fall below $10.00.
Technically, initial price support in the May futures is at $14.60 and the next support levels are at $14.20 and $13.80 at the major moving averages. If prices can hold $14.60 price level, the next resistance levels would be in the $15.00 – $15.50 price range. For old crop soybeans, I would recommend making some sales. For November 2014 futures, initial support is at $12.00, and the next support levels are in the $11.80 to $11.70 price range. I am concerned the final soybean acres could be up 1 – 2 million acres increasing ending stocks and putting pressure on prices. Therefore getting some new crop soybean production priced over the next few weeks would be prudent.
Wheat
Wheat quarterly stocks came in at 1.056 billion bushels, only 14 million bushels above the average trade guess. Planted acres were estimated at 55.8 million acres, 412 thousand acres less than the average trade guess.
The wheat rally since February was fueled based on the dry weather in the western plains, good exports, and the uncertainty in Russia, Ukraine, and Crimea. The lack of any additional bullish news the past few weeks has resulted in prices pulling back.
Technically, July futures need to hold $6.60 or it may try to test the next support level at $6.40. Resistance is at $7.20. I would use rallies back into the $6.90 – $7.00 price range to make some sales.
Cotton
Cotton acres were projected at 11.1 million acres. In February, the National Cotton Council estimated acres at 11.26 million acres. In cotton, we have a very tight old crop ending stocks at 2.8 million bales, but new crop ending stocks could grow to 6.0 million bales.
It is important for a cotton producer to remain in close contact with his cotton buyer to get the most current price quotes.
Technically, May futures is in a trading range of 89.90 – 97.35 cents. A break out of this range and prices could easily move another 3 to 5 cents. I would use the present prices to make some sales. December futures is in a trading range of 79 – 80.5 cents. Just like in the old crop futures, a break out of this trading range and prices could move another 3 – 5 cents. I would use rallies above 80 cents to make some sales.
Rice
Rice acres were projected at 2.877 million acres, up 388,000 acres from last year.
For cash rice quotes, contact your rice buyer to get the most current price quotes and cash price outlook.
Technically, May futures has made a nice rally off the support at $15.20 to rally up to $15.80, and is close to the next resistance price level at $15.90. I would use this price rally to make any old crop sales. September futures has also made a nice rally off the support at $13.90 to rally up to $14.40 with the next resistance at $15.00.
