Trading Corn & Wheat

Corn Charts (Wheat is below) . . . :



Daily Chart: Dec.08 Corn...

Daily: Dec.- CORN

Historical: Dec.Corn




Saskatchawan Wheat Board / SWP.t

Saputto Cheese / SAP.t



CORN FUTURES (C) look interesting on ...


...compare with Wheat...

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SEASONALITY (J. Wyckoff):
Corn: This market's seasonality can be divided into three time periods: late spring to mid-summer; mid-summer to harvest; and post-harvest. The most pronounced seasonal trend in corn is the decline of prices from mid-summer into the harvest period. Prices are often near their highest level in July because of factors associated with the old crop and uncertainty over new crop production. Even in years when a price decline begins before mid-July, it can continue after mid-July if the crop outlook is favorable. Harvest adds large supplies to the marketing system, which normally pressures prices to their lowest levels of the crop year. Prices usually rise following harvest. However, the "February Break" is a well-known phenomenon whereby corn prices usually show some degree of decline during the month of February.

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SPECTRUM's SUMMARY (excerpt):
Corn
The U.S. 1999/2000 crop was estimated at 9.47 billion bushels (240.5 million metric tonnes), the third highest on record and comparing with 9.76 billion in 1998/99. The record high 10.1 billion bushel crop was realized in 1994/95. Both harvested acreage and average yield decreased in 1999; acreage of 70.9 million compares with 72.6 million in 1998, while average yield of 133.5 bushels per acre was down from 134.4 bushels, respectively. Two states, Iowa and Illinois, generally account for about a third of U.S. production.

The large crop, combined with the expected decline in 1999/00 exports, will lift carryover stocks as of August 31, 2000, to almost 2 billion bushels, a record high, and comparing with the year earlier 1.8 billion bushel carryover. The stock-to-use ratio in 1999/00 was forecast at 21 percent vs. the previous season's 19 percent and the very low 5 percent ratio of 1995/96: typically, the higher the ratio, the greater the pressure on prices. In 1999/00 the average price received by farmers was forecast to range between $1.65-2.05 per bushel vs. the 1998/99 average of $1.95, and the 1995/96 record high of $3.24. If a less than $2.00 per bushel average is realized in 1999/00 it would be the lowest of the past decade.

Corn is by far the leading U.S. feed grain with sorghum a very distant second. The crop year (marketing) encompasses September/August, but the international trade year is October/September. Animal feed usage in 1999/00 of 5.5 billion bushels is marginally higher than in 1998/99. Food, seed, and industrial use (FSI) was estimated at a record high 1.88 billion bushel in 1999/00 vs. 1.82 billion in 1998/99. The increases in FSI use during the past few years is not surprising considering the rising industrial demand for corn as a sweetener; High Fructose Corn Syrup (HFCS) usage continues to gain, up another 3 percent during 1998/99 from 1997/98. Corn used to make ethanol was also up, 9 percent from the prior year, and forecast to rise 5 percent during 1999/00.

The U.S. is the world's largest corn exporter, with Argentina a distant second. Importers are numerous but the leaders are generally in Asia paced by Japan, South Korea and Taiwan.

Link:
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TOP CORN Producers:
Corn - World Supply and Demand Summary

.1. U.S.: Aver. 236,041 TMT prod. / consumer: 183,119 TMT (exports 49,079 TMT)
.2. China: Aver. 115,586 TMT / consumer: 112,014 TMT.
.3. Brazil: Aver. 34,179 TMT / consumer: 35,073 TMT
.4. Mexico: Aver. 17,910 TMT / consumer: 22,617 TMT (imports 4,806 TMT)
.5. Argentina: Aver. 14,860 TMT / consumer: 5,418 TMT (exports of 9,521 TMT)
.6. France: Aver. 14,791 TMT / consumer: 7,774 TMT. (exports are 7,295 TMT)
.7. India: Aver. 10,504 TMT / consumer: 10,473 TMT
.8. Italy: Aver. 9,178 TMT / consumer: 9,683 TMT
.9. Romania: Aver. 9,102 TMT / consumption is 8,789 TMT
10. South Africa: Aver. 8,382 TMT / consumption averages 7,880 TMT
Corn Importers:
1.Japan, 2.S.Korea, 3.Taiwan, 4.Mexico, 5.Egypt,
6.Spain, 7.x, 8.x, 9.x, 10.x
... 15.Brazil
:SOURCE:

Supply/Demand Table:
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Wheat Charts


WHEAT FUTURES (KW) look interesting on ...


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Recent Tech Comment:
Technically, Chicago wheat has been hovering on the 100-day moving average, trying to hold that support. However, KC has been hovering just below that same moving average, with Friday’s strength managing to barely get back above it. This is becoming a key price point, as the funds tend to trade off of the 100-day moving average, and if the market can show a more sustained position either above or below it, the funds are likely to follow in force.
As of Friday, the 100-day moving average on:
- Chicago March was at 375.5, and
- KC March at 4.16.
Swing low support in Chicago March is the trading range low of 3.68-70, with resistance at 3.91-2. In KC March, support is this week’s low of 4.06, then the major low of 3.98. Resistance is 4.33, then 4.40.

CHART (with 100d, 200d ma's):

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SEASONALITY (J. Wyckoff):
Wheat: The seasonality of wheat prices works best when a trader is on the long side from the period of harvest lows to October\November. On the short side, from winter into summer harvest tends to work well. Wheat has two prominent seasonals: One is a strong tendency to decline during late winter and spring as the harvest approaches. The other is to rise from harvest lows into the fall or early winter. Wheat prices begin a seasonally weak period by January or February, in most years.

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There is a strong tendency for wheat to decline in the last few days of the year and the first few days of the new year, mostly due to farmer selling for tax reasons. Unfortunately, this comes at a time when buyers are all but absent from the market as they take time off for the holidays.

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SPECTRUM's SUMMARY (excerpt):
Wheat
World wheat production in 1999/2000 of 578 million metric tonnes compares with 588 million in 1998/99 and the record high 1997/98 crop of 609 million tonnes. Production in the mid-1990's averaged about 540 million tonnes.

Global consumption in 1999/00 of 586 million tonnes compares with the record high 591 million in 1998/99. For the second consecutive season, a draw on carryover stocks will be necessary; the projected ending 1999/00 carryover of 128 million tonnes compares with 136 million a year earlier and the record high 139 million of two years ago. Still, carryover supplies appear adequate, certainly relative to the 106 million tonnes at yearend 1995/96, the lowest since the 1970's. The 1999/00 world stocks-to-usage ratio of about 21 percent compares with 23 percent a year earlier.

Since the late 1980's, China has been the world's largest single wheat producer with nearly 20 percent of total production, 117 million tonnes in 1999/00 vs. 116 million in 1998/99. China's wheat acreage appears to have stabilized near 29.5 million hectares, but average yield improved during the 1990's. China's 1999/00 domestic wheat usage was forecast at a record large 117 million tonnes, marginally higher than in 1998/99. Despite the moderate supply/demand imbalance, China's 1999/00 imports of only 1.5 million tonnes pale relative to numbers earlier in the 1990's when imports over 10 million tonnes were not unusual. China's carryover increased during the late 1990's, but the marketplace tends to view the government's official totals as suspect: the ending 1999/00 carryover of 27.1 million tonnes compares with 28.1 million a year earlier. What seems more certain is that China's import needs are very price sensitive and world prices can quickly strengthen on talk, real or otherwise, of Chinese buying which, in turn, brakes their interest.
Link:
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November 15, 2002: China Awash in Wheat
Well, we have to admit that USDA warned us they would “adjust?China’s wheat stocks, and even hinted at the 13 MMT figure. What they gave us was more than triple that number, with a 42 MMT increase in Chinese ending stocks. That’s almost equal to total US wheat production this year, at 44 MMT. In less than two years, China has “found?more than 80 MMT of wheat, completing erasing any suspicion that they were running short and would need to import wheat. On the contrary, they’ve actually entered into the export arena ?with milling wheat no less. Not only is China not short of wheat, but it also eases the tight world stocks situation as well.

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SOME CORN & WHEAT-related companies:
Symbol.. Company
CPO-- Corn Products
BG--- Bunge
????- Dekalb Agri.
????- Louis Dreyfus Citrus
..
BG, CPO, AU.t
. .

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LINKS:
FuturesSource:
Quotes:
INO charts:
Options:
Jim Wyckoff:
Spectrum Comm.:
COT Charts (Long term):
ChartTraders (Education, etc):

Commodity threads:
Coffee------:
Corn & Wheat:
FreightShips:
Orange Juice:
Soybeans----:
Sugar-------: