October 19, 2011
By: Craig Haugaard, Grain Origination Manager
CORN: 2 higher
I know that a lot of you use smart phones so I am excited to announce that SDWG has a site that you can access from your mobile phone that I believe is the best source of market information that I have ever seen on a mobile phone. To access the site you need to type in http://sdwg.mobile.agricharts.com/ Once you do that you are off to the races with great futures and cash price information as well as weather and agricultural news. I am excited that we have it available for you and hope you find it as useful as I do.
Weakness in the Dalian market had the market lower at the open yesterday but it was able to shake that off and post a decent close. In terms of actual corn related news there really was not very much to talk about yesterday. The weekly export inspections number came in at a very disappointing 21.2 million bushels for the week. This was well below the 31 to 34 that the trade was looking for and has the cumulative exports already lagging last year by 70 million bushels and losing ground weekly it seems. If the exports seem a little bearish the ethanol demand would appear to be a bullish factor. As we discussed in this space yesterday at the current pace we are on track to come in with usage as much as 200 million bushels more than the current USDA projection. A wild card is the dollar and how it will react to the ongoing situations in Europe. If Europe has more problems and the dollar strengthens it could put additional pressure on commodity prices. On the other hand if Europe skates through this in great shape we could see the dollar revert back to the weakness of the not too distant pass and that would tend to be bullish from commodities. Other things to keep an eye on still include China where the conventional wisdom says that if we get the spot futures under $6 we could very well see them step in and replenish their stocks. On the technical side of things all of my indicators remain bullish at the present time. I continue to see significant support in the December futures at $5.75 with solid resistance at $6.52.
SOYBEANS: 1 lower
We had pretty solid weekly export inspection numbers yesterday. The trade was looking for something in the range of 25 to 35 million bushels so the weekly number of 45 million was a pleasant surprise. For the year thus far cumulative exports are running 117 million bushels behind last year. As our harvest wraps up the focus will shift more to South America where production problems could provide a spark to this market. This far it seems pretty smooth down there as conditions are described as great and it appears that by week’s end 20% of the Brazilian crop will be in the ground. At some point we may see more pressure on this market as a result of the slow export pace as well as slow crush rate but concerns that the national average yield could be lowered in November will probably keep traders from pressing this market to hard. Technically, all three of my indicators are bullish. I look for the $12.75 area to offer very solid resistance for now. I would sell against that level right now if I had any beans left to sell and expect the $11.52 area to provide major support to this market.
WHEAT: 4 higher
The weekly export numbers were seen as disappointing as the trade was looking for something in the 16 – 20 million range and the number came in at 16.4 million bushels. Probably should not have been a huge surprise since we keep hearing about the cheap Black Sea wheat that is beating us like a drum. In the end that is probably the show down that we will have in the wheat market. In one corner you have the world’s increased stocks while in the other corner you have the USA’s HRW drought. Right now it looks kind of like a Mexican standoff which has the futures prices in a sideways trading pattern.
The information contained above was taken from sources which Wheat Growers believe to be reliable, but is not guaranteed by Wheat Growers as to accuracy or completeness and is made available for information purposes only. There is a risk of loss when trading commodity futures and options.