Commentary
Markets closed higher after choppy action the first half of the trading session. Corn, KC wheat and MGX all managed to put in some impressive reversals higher given new contract lows seen in each of these three markets. We have seen similar attempts at creating bottoms through these reversals, but any follow through has been short-lived in those cases. Kansas, after the bell came out with state ratings. 57% of the winter wheat crop came in the good/excellent category versus 13% poor/very poor. Subsoil moisture came in at 41% short/very short. Approximately a month ago Jan. 28th, Kansas state ratings were 54% good to excellent, 15% poor/very poor. Subsoil last month 43% short/very short. If you compare back to Nov. 26th 32% of the crop was rated good to excellent, 32% was poor/very poor. Subsoil 73% was short/very short. Weekly export inspections were decent totaling 17.7M bushels which landed near the upper end of estimates ranging 9-19.3M bushels. In other news, per Pro Farmer: the Ukrainian government has urged Poland to punish those responsible for spills of a Ukrainian grain cargo at the border over the weekend, Deputy Prime Minister Oleksandr Kubrakov said. Around 160 MT of Ukrainian grain were destroyed at a Polish railway station amid protests in what a senior Ukrainian official said on Sunday was an act of “impunity and irresponsibility.” Polish farmers are protesting what they describe as unfair competition from Ukraine and European Union environment regulations, blocking border crossings with Ukraine and deliberately spilling trains loaded with Ukrainian grain. At the end of the day, Kc wheat finished 11 cents higher with Chicago up only 5 cents. Proof is needed to see if this reversal will mount a sustainable rally, which translates to, will the funds cover off of the reversal? With number one producer Kansas showing better conditions, a continuation rally would look impressive in my opinion as the market rallies vs bearish news. May KC wheat needs a close over 5.78 first and then more importantly 5.90 to turn friendly. A close under 5.57 would take us to new lows in my view and bearish technically. (See weekly chart).
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Sean Lusk
Vice President Commercial Hedging Division
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