Friday, February 8, 2013

FC Market Commentary for February 8, 2013 afternoon

Corn settled down 2c after a slightly bearish corn report showing a US ending stocks increase of 30 million bushels. The story remains the same..tight US corn stocks and weather concerns for South America (particularly Argentina). Argentina is expected to see some rains in the short term forecasts while longer term forecasts remain spotty. Expect Argentina weather to remain a headline topic until enough rain eleviates worries among traders. Technically speaking corn should find some support from the 200 day moving average as we approach $7.0425 (upper chart below). If we break through those levels the next area of support looks to be the Jan. 7th low of $6.78.

Soybeans settled down 34c after the USDA tightened soybean ending stocks by 10 million bushels. Seems to go against common logic with tightening supplies that prices would drop. However, world ending stocks for soybeans increased .66 million tons lead mostly by record production from Brazil. Similar to corn weather in Argentina seems to be more of a concern than Brazil. Wet weather in Brazil has struck up some interest as harvest in some areas are 10% behind last year’s pace. It’s meerly a logistically issue and the concern is delays may push a vessel into the US which our ending stocks show we can’t afford. Technicals for beans turned nasty as we fell below the 200 day moving average trigger stops. Next level for support is at the 50% retracement of 14.30.

Kyle Lehman
Farmers Cooperative Company
Ames, Iowa, USA

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