October 21, 2011
By: Craig Haugaard, Grain Origination Manager
CORN: 9 higher
A few years ago I had a friend that bought his dream pickup and had vanity plates put on it that said CUZICAN. As far as I can tell that could have been the theme for yesterday as well. Why did the market go up? Because it could. We had decent export sales yesterday but they were known before the market opened so it is hard to use that as the justification for a rally that started around 11:20 a.m. We did see aggressive fund buying yesterday as they stepped in and bought 10,000 contracts for no real discernable reason other than CUZICAN. Now that I reread that I see it was not my best comparison. I was tempted to compare this market to a run-in that I had with a midget in a huge pickup truck a few years ago but that will have to wait for another day. What I found most interesting with the action yesterday was the manner in which we once again approached that $6.52 area. This has been a crucial area of resistance. We finally broke through it in the night session and the test will now be to see if we can get a decisive close above that level. If we do it should open the door for a move to at least $6.77 and possibly $7.01 basis the December futures.
SOYBEANS: 9 higher
Export sales that were on the disappointing side of things coupled with more yield reports that were 10% or so better than last year put some pressure on this market for the first part of the session. As corn started its rally it pulled beans along with it to enable them to close near the highs for the day. Starting the session today all three of my technical indicators are bearish and although I know I sound like a broken record (wow that is a real out of date reference) but I still look for solid support in the November futures at $11.52.
WHEAT: 5 higher
My slow cousin Jimmy was over at the house last night and as we were sitting on the couch talking he looked at the fireplace where a family picture taken when my oldest son was 4 is hanging and said, “Hey Cwaig, how long have you had that pictuwe thewe?” Since my oldest son in now 30 and I have had the picture hanging in the same spot since we moved into the house almost eight years ago I replied by hitting him with a pillow. It seems to me that this is what happened in the wheat market yesterday. I have been running maps from time to time that show the level of the drought in the USA and since they are National Weather Service maps they are not exactly a well kept secret. In spite of that it seems like yesterday the trade as a collective group suddenly went, “Wow, it is really dry down there,” and started buying HRW futures. This drove the market to a very nice close for the day and in winter wheat all of my technical indicators are now bullish. It will be interesting to see if they can maintain this momentum or if we will go back to trading the cheap Black Sea wheat and ample world supplies scenario.
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.