105 S. Grant Avenue
P.O. Box 342
Fowler, IN 47944
(765) 884-1871 or (800) 872-0126
Market Views for Monday April 12th, 2004.
Early Call: Corn down 4-6, beans down 5-10, wheat down 4-6. A possible tech washout in the grains today should start the grains sharply lower. Poor technical action last week, particularly in the bean complex, combined with thoughts turning to potential rapid planting progress should press the market sharply lower today. After posting a key reversal last week in the bean complex, beans also managed to close below their opening every day last week, which is a sign of waning momentum. Traders also had the weekend to watch the planters roll, which has a negative psychological effect on the market. Additionally, long term yield studies have shown that whenever corn gets planted early, there is a large propensity to see at least trendline yields. While the fundamentals haven't changed, market psychology may have and with funds huge owners of the grains, corrections could get rather violent. Longer term US weather forecasts are calling for a change in pattern as we move through the week, with warmer and wetter weather approaching as the weekend nears. Next week also looks rather rainy, so by this time next week, after a good correction, we may be trading planting delays! Cash hogs are called steady to $1 higher today, with Peoria called up $1 at $40 after holding steady on Friday and falling $2 on Thursday. Cuts were up $1.17 on average movement of 64 loads while weekly kill was 3.73% above a year ago. Packer margins are excellent and they may have to spend this week to get hogs. It looks like last week's lows may signal a temporary bottom as long as numbers hold steady and don't climb this week. I have to be rather brief today as I'm busy placing orders. Watch May beans very carefully near the 40 day moving average of $9.60 today as we haven't been below the 40 day since December and haven't closed below it since August. A violation of this level could signal a change in trend and could send bulls scurrying regardless of long term fundamentals. I sense that the timing is right for a break, especially in soybeans as S. American beans are coming on as well. I'd use weakness in soybeans that spreads to corn to buy corn, but be patient until later in the week and watch next week's forecasts carefully. A dry week would require further patience while a wet week would signal action. The new website is nearing completion and should be ready for regulatory approval today (I hope), and hopefully will come on line by the end of the week.
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