October 28, 2011
By: Craig Haugaard, Grain Origination Manager
CORN: 4 lower
I will be the first to admit that I am a little twisted but as I have watched the European economic situation push to the brink of imploding, watched the Greeks riot because they are now going to have to work a full 30 hours a week or some ridiculous thing and then watched the leaders of the EU scramble to make it all better I have been putting theme music to the whole deal.
Who can take a sunrise, sprinkle it with dew
Cover it with choc ‘late and a miracle or two
The Euro Man, oh the Euro Man can
The Euro Man can ‘cause he mixers it with love and makes the world taste good…
Anyway yesterday apparently the Euro Man fixed everything because as soon as the European leaders announced their plan for the economy the dollar plummeted and commodity prices took off to the upside. This morning we have the dollar trading a little higher and of course the overnight session was a touch lower so we shall see if this was a one day wonder or if it has legs. Prior to the European news igniting the market we were trading more of the corn fundamentals. In particular we were trading the weekly export numbers which were disappointing. The trade was looking for something in the 650 to 950 range and the actual weekly number came in at 361. As far as the technical story goes the action yesterday has all three of my indicators bullish as we head into today’s session. In the December futures I would look for resistance at $6.65 and initial support at $6.30. The following weekly chart shows the relationship between corn and the dollar with the black line being the dollar and the red line the spot corn futures.
SOYBEANS: 8 lower
Soybean exports are running a full 25% behind where they need to be in order to hit the USDA projections. Yesterday didn’t help any as the weekly export sales were announced as just shy of 255, well below the range of trade expectations which ran from 650 to 950. China has nearly been AWOL as of late and that has hurt exports considerably. I see this morning the China is projecting that they will import 4.83 MMT of beans in October. That is 1.1 MMT more than they did for the month last year and if true would get them back on the pace projected by the USDA. On the other hand, news out of China is that soybean acres in that nation are expected to be down as farmers in that nation can apparently figure returns per hectare and are planting more corn. Technically, two of my three indicators are now bullish and I would look for resistance at $12.75 and support at $12.09 basis the January futures for the present time.
WHEAT: 7 lower
The same story was played out in wheat where poor weekly exports were trumped by a weak dollar that rallied all commodities. In weather related news the forecast that I am looking at this morning is showing the potential for very large rains in the southern plains next week. If that materializes that would be very welcome but also probably a little bearish. Technically, all three of my indicators are now bullish for both Minneapolis and Kansas City wheat futures.
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.