October 25, 2011
By: Craig Haugaard, Grain Origination Manager

CORN: 4 higher

Well, we were higher in the overnight once again but the question is; Does this mean anything?  The past couple of night sessions we have had a very strong market only to fizzle to a disappointing close in the day session.  As I look at the chart what disappoints me the most is the way that corn has behaved when compared to crude oil and the dollar.  As you can see on the following chart corn (black line) has moved slightly higher while crude oil (red line) has shot up and the dollar (blue line) has retreated significantly.  Normally I would expect corn to perform better in light of those factors.  After the close yesterday we had the USDA harvest progress report which shows corn at 65% harvested.  This is well ahead of the five year average of 51% harvested and is indicative of the excellent harvest weather we have enjoyed.  The charts, it spite of the disappointing closes still have all three of my technical indicators solidly in the bullish column.  I continue to look for a solid close in the day session above $6.52.  If we get that I believe that it opens the door for a move to at least $6.77 and possibly $7.01 basis the December futures. 

SOYBEANS: 5 higher

There is not a great deal of news in the soybean market.  South America appears to be about a third planted and has been getting some beneficial rains.  In the export world I see that China imported 4.13 MMT of beans in September and stand at a total of 52.3 MMT imported thus far this year.  A year ago that total stood at 50.38 so their appetite continues to grow.  The harvest progress shows the bean crop is now 80% harvested, which is running ahead of the five year average pace of 71% for this week.  Technically we continue to chop around with two of my three indicators now bullish the November futures and I still this as a trading range market with solid support in the November futures at $11.52 with resistance at $12.72. 


WHEAT: 5 higher

Wheat is kind of interesting with the drought conditions now being viewed as the worst in over a decade.  In spite of this ongoing drought it was interesting to see the USDA place the HRW crop at 47% good to excellent.  That was a large portion in that category than what the trade was looking for and has to be viewed as a little surprising based on what we think we know about the ongoing drought.  Planting pace for winter wheat is running close to the five year average with 82% of the crop planed versus the five year average of 84%.  The emergence is running behind normal, however, with 56% of the crop reported as emerged.  All three of my technical indicators are bullish for both Kansas City and Minneapolis markets.  This still looks to me like a trading range market that will probably follow the lead of corn in terms of direction. 

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.