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April 22, 2014
Weather
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Southwestern U.S. Plains will have opportunity for rain Wednesday, but the larger weekend storm
system in the Plains is not likely to generate much rain in the region. Relief from dryness Wednesday will
prove inadequate for most of the region
Weekend storm system in the central and interior northern U.S. Plains remains a large event that will
bring rain to many areas. The moisture will stall fieldwork for a while
Weekend storm in U.S. Plains will also impact the central and western Corn Belt with sufficient rain to
bolster topsoil moisture.
1. Delays to farming activity will become common place during the weekend into Tuesday for the
western Corn Belt.
Eastern U.S. Corn Belt will also be impacted by storm and cooling temperatures, but mostly Sunday into
Wednesday, April 30 Delays in fieldwork are expected during this period of time
a. Rain totals may vary from 0.75 to 2.00 inches with Illinois and Indiana wettest
Showers and thunderstorms likely in western U.S. Corn Belt Wednesday and in the east Thursday of
this week with rainfall of 0.20 to 0.75 inch except from eastern Nebraska to Wisconsin where more than
1.00 inch will result. Fieldwork will be delayed for a day or two from this event. Only a couple of days
favoring fieldwork will follow before the larger weekend storm bears down on these same areas\
First week of May will be a little drier for U.S. Plains and Midwest, but rain is still possible
Canada’s Prairies will be wet this week, especially in the west and south resulting in a setback in the
region’s drying trend and prospects for fieldwork Southeastern Canada will receive rain today and again
this weekend. Most of it will be light, but the region continues cool and wet. Drying is needed to get
fieldwork under way. Temperatures will be cooler than usual during the coming week
News
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USDA reported private sale of 240,000 mt of US Corn sold to Mexico for the 14/15MY
China’s Ministry of Commerce raised their April bean import estimate from 5.11 to 6.9 mmt,
while cutting their March figure from 5.69 to 4.12 mmt.
Statistics Canada is expected to estimate the country’s 2014 all wheat acreage at 24.4
million on Thursday morning, according to a Reuter’s trade survey; that would be down 7%
from last year. Canola plantings are seen rising 6% to 21.1 million acres, the second-largest
ever behind 2012’s 22.0 mln ac. Barley and corn acreage are seen fairly steady from last
year’s 6.7 and 3.5 mln ac, respectively, while soybeans are seen up from 4.5 to 4.8 mln
acres in 2014.
Technicals
Disclaimer: Commodity trading and other speculative/ hedging investment practices involve substantial risk of loss. PAST RESULTS ARE NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS when utilizing the commodities markets. Gulke Group and its officers, directors, employees and
affiliates may take positions for their own accounts that are the same or that are different to the positions and to the contracts referred to herein. This material
and any views expressed herein are provided for informational purposes only and should not be construed in any way as an endorsement or inducement to
invest. Prices used in trade recommendations are already reflective of known information.
Markets/Observations:
Weather: Variable weather and thus variable planting progress next week to 10 days. In fact it appears
the warmest day for the next two weeks was last Sunday. There has been some much needed rainfall in the
western Corn Belt especially in parts of Iowa and eastern Nebraska. It has not been enough to replenish the
depleted soil moisture, but every little bit helps. The areas that still need additional moisture include: Texas,
Oklahoma, Kansas, central Nebraska, western Iowa, southwestern Minnesota, and southeastern South Dakota.
Best planting days in the western Corn Belt will be today and Friday while the best days in the east will be today
and Wednesday and again Friday and Saturday. After these days of good field working conditions there will be
several days of delay because of rain, followed by several days of improving weather. The second half of next
week and into the following weekend will be best for fieldwork in the western Corn Belt while the eastern areas
will see the best conditions late next week through May 5.
Planting Progress: As of Sunday, 6% of the U.S. corn crop had been planted compared to the five-year
average of 14%. Most of the corn planting progress was in the more southern locations including: Louisiana at
97%, Mississippi at 64%, Texas at 60%, Arkansas at 52%, Missouri at 26%, Kansas at 21%, and Tennessee at 19%.
In the heart of the Corn Belt Illinois leads with 5% of the corn planted, Nebraska has 4%, and Iowa has 2%. One
percent or less of the corn was planted in Ohio, Indiana, Minnesota, South Dakota, and North Dakota.
Spring planting continues to get off to a slow start, but the planting pace should accelerate this week with
some of the best weather thus far this spring season over some areas. Many farmers have been waiting for the
soil temperatures to warm up enough to insure corn germination. Thanks to the warm weather over the
weekend, the soil temperature at the 4 inch depth in Iowa and Illinois is approaching the low to mid-50s, which
is about the minimum for corn germination. But may slow with temps in the 50s for daytime and high 30s to low
40s at night. An average pace of planting and a preliminary estimate for corn yields of 163 bu trend-line, we
need approximately 50% of the corn in the ground by about the end of the first week of May, which is two and a
half weeks away. While attainable, odds are increasing that it may be difficult to reach 50% by that date. The
market is fully aware of course that late plantings of the last few years did not prevent reaching good yields.
Unless genetics have changed significantly, odds are not in favor of average yields with late planting dates.
Planting Progress at 6% was far less than the 12% many were touting. The chart above shows how we compare
to normal, and not just last year. Ground Temps remain well below 55 degrees in N IL. Wheat ratings remain
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very poor with OK talking about freeze damage last week. Last week’s rains where helpful but too scattered to
improve overall conditions. Corn seeding remains slower than normal although it is very early in the planting
season and good progress should be made in many areas this week.
Livestock: Cattle- Boxed beef prices were sharply higher on fairly good movement, offering a chance for
support. Technically hogs are still negatively biased.
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Yesterday’s Trades: No new trades.
ADVICE: No suggestion last Thursday that we’d see a drop in grains like we saw yesterday. Weather and planting
expectations were to blame as well as profit taking. Given only 6% planted and cool-ish weather, we could have
posted the lower end of a short term trading range. Certainly yesterday’s lows represent a line in the sand as
uptrends held in corn/beans yesterday, necessitating the need for prices to hold here. A lot of stops were hit in the
spec table yesterday. Grains, oilseeds, cotton all trying to recover this morning. We’ll stay patient a little while
longer and make no changes today in grains or livestock pending weather forecasts and mid-day
observations, of course. No changes in our call spreads in corn.
Cotton: Daily signals have gone long and short term support at 90 continues to hold. Exit July hedges on a move above
93.70. We will add another 20% hedge on a move below 90 cts basis the July contract.
Rice: Sell off yesterday took us close to support at 15.00. Use a move back above 15.40 to lift hedges in July contract.
Disclaimer: Commodity trading and other speculative/ hedging investment practices involve substantial risk of loss. PAST RESULTS ARE NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS when utilizing the commodities markets. Gulke Group and its officers, directors, employees and
affiliates may take positions for their own accounts that are the same or that are different to the positions and to the contracts referred to herein. This material
and any views expressed herein are provided for informational purposes only and should not be construed in any way as an endorsement or inducement to
invest. Prices used in trade recommendations are already reflective of known information.
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Disclaimer: Commodity trading and other speculative/ hedging investment practices involve substantial risk of loss. PAST RESULTS ARE NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS when utilizing the commodities markets. Gulke Group and its officers, directors, employees and
affiliates may take positions for their own accounts that are the same or that are different to the positions and to the contracts referred to herein. This material
and any views expressed herein are provided for informational purposes only and should not be construed in any way as an endorsement or inducement to
invest. Prices used in trade recommendations are already reflective of known information.