Back to Main Markets In Transition?

• Published: 2010-03-05 20:41:24

  In light of the recent market advice we published, suggesting a defensive hedging mindset in 2010, it was interesting to ProFarmer Canada's views on the market this week.
  
  ProFarmer Canada thinks markets are in transition from 2 years up (2007-08), 2 years down (2008-9) and now 2 years sideways (2010-?). That is..unless new fundamental catalysts arise to alter the general market course.
  
  If we are dealing with a transition into a period of sideways trending ag markets, we then should view market probes to the upper end of recent trading ranges (and hopefully higher) as selling opportunities.
  
  Fundamental foundations of the major ag markets are different than recent years and we should expect price ceilings to develop this spring.
  
  The USDA’s new crop US acreage forecasts due out on March 31 will likely be a reminder of bearish fundamental profiles in US soybeans, corn and wheat.
  
  It’s impossible to say with certainty, but without heightened new crop planting worries, a spring seasonal top may come early (that is now).
  
  CBOT corn and soybean futures are likely to run into resistance at prices 25-30US¢/bu on corn and 40-50US¢/bu above current levels.
  
  A move in the Nov 10 canola contract towards CA$405/t could be an initial target. The big hope for canola is a more favourable Chinese import policy – bearing in mind that Chinese rapeseed prices are around CA$30/t above current Canadian landed values.

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  Supplied by ProFarmer Australia