October 20, 2011
By: Craig Haugaard, Grain Origination Manager
We saw the funds sell 8000 contracts yesterday which put some pressure on the market. This could become a trend as the CFTC voted yesterday to limit the amount of contracts that speculators could hold. There are a lot of details to work out and it is no slam dunk that it will survive Congress as we are already seeing some political opposition to it. I personally hope they drive a stake through the heart of this plan. Other than that there is very little fresh news in the market. It looks like harvest in the eastern Corn Belt may be halted for a few days as a result of rain but longer term they will be back to good harvesting weather. On the technical side of the market we have no change either with all of my indicators remaining 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: 2 lower
Good rains moving through South America, fund liquidation and the overall impact of a harvest market drove beans lower yesterday. The other fundamentals driving this market remain unchanged from what was discussed in this space yesterday. Technically, the recent action has turned two of my three indicators bearish although I still look for solid support in the November futures at $11.52. Barring the Chinese showing up and going on a buying spree this market will probably flounder in the short term.
WHEAT: HRS 4 lower HRW 1 higher
The Ukrainian president signed the law that dropped the export tariffs yesterday so the world export market just got a little more competitive. The abundance of cheap wheat from the Black Sea region has been a story for some time now so there is nothing new there. I see portions of HRW country may pick up a little rain the next few days but the longer range forecast looks like cooler and dry so the cavalry is not coming over the hill for that crop yet. The charts are about as uninspiring as a church potluck supper as we continue to move in a sideways trading pattern. Look for the wheat to continue to take its market direction from corn with nothing really exciting expected for today.
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