CN:SB ratio narrows!

In recent weeks dec corn values have only fallen about 15 cents while nov soybeans have fallen 80 cents narrowing the corn:soybean ratio on a weekly basis to 2.5:1 which is exactly the 15 year average for the ratio. Does this mean that farmers planting intentions regarding soybeans will change? Probably not. But it does point out the markets dim view of where soybean values should be as the South American crop continues to get bigger and the US farmer seems resolved to seed soybeans in a big way.

As this is written soybean values have yet to establish a bottom and signal a turn around. Downside risk in May soybeans is to 880 and in November soybeans to 870. I am not recommending sales in this oversold condition unless you have little coverage and fear those lower targets are attainable.

May corn bottomed at 353 and that is current support with downside support at 350, 340 and 330. Market momentum is midrange meaning that it is looking for a fundamental reason to take a direction. Currently there is no bullish fundamental support in the corn market. Upside target is 370.

Dec corn has held up well as the market is digesting the ramification of dropping 4 million acres of production. The current wet weather may be the support we need to continue to support values. Support is 385 then 375. Target 393 and 402.

May wheat momentum is picking up and points to higher values but not by much. Support is 428. Target a sale at 445, the 200 day moving average, and get rid of any remaining 2016 crop wheat unless you are prepared to carry it into late 2017.

July wheat support is 440 with downside risk to 420. Watch to see if we can test the 200 day moving average at 460. If we fail at that point then a sale should be made. A close above 460 points to a trade closer to 480.