November 8, 2011
By: Craig Haugaard, Grain Origination Manager
CORN: 2 higher
This market has been about as fast moving as a tortoise on valium lately and I don’t think things are going to change much today. With the USDA report coming out tomorrow I would look for a fairly slow day as traders try and get into position ahead of tomorrow’s report. As far as yesterday goes we are dealing with the same old stuff. That stuff includes:
1) Good weather in South America with planting flying along and record corn crops projected for both Argentina and Brazil.
2) Cumulative export loading currently running 23% behind last year’s pace as we bang heads with feed wheat as well as corn from other countries.
3) Better than projected ethanol usage so far.
4) Harvest that is wrapping up with 87% of the crop now harvested nationwide. This is running well ahead of the five year harvest pace of 73%.
Beyond those items what folks are really interested in are the USDA numbers. Once we get those we will probably still have folks wanting to debate how many acres were really planted this year and if the number we are given tomorrow accurately represents the impact of the hot summer nights or if the actual national average yield is less than what the USDA is giving us. Is interesting as that might be it is also fairly irrelevant as ultimately the trade will live and die with the USDA numbers. In the world of chicken bones and snake oil, i.e. technical trading all three of my indicators are currently bullish with support at $6.00 and solid resistance in the December futures at $6.65 with a gap at $6.85. Actually, as I look at the chart I think the technical’s don’t right now since we are in a sideways market and when you try and trade technical’s in a sideways market you usually just get chopped to pieces. Let’s hope tomorrow brings us something fresh to trade.
SOYBEANS: 6 higher
They have great planting weather and a near record planting pace in South America. Here in the USA we are running 4% ahead of the five year averages as we stand at 92% harvested nationwide. At the same time our export numbers would have to improve to get up to pathetic as we are currently lagging last year’s cumulative loadings by 35%. Technically, two of my three indicators are now bearish. Looking at the January futures it looks like we should have solid support at $11.63 and tough resistance at $12.84.
WHEAT: 2 lower
I actually have some pretty uplifting news from Ukraine where it appears as if drought is hitting their crop hard. One story that I read said that in some areas half of the crop hasn’t even sprouted because of the dryness. Estimates right now are that they could lose roughly 30% of their winter grain production. Strangely enough that doesn’t seem to be enough to get them to stop the fire sale they have been holding on last year’s crop. Here in the USA we are seeing some moisture come in and the crop conditions reflected it with 49% of the winter wheat crop now rated as good to excellent. That is up 3% from last week but still lagging the five year average of 57.6% good to excellent. The charts on both HRW and HRS look like they are just sliding sideways in a fairly tight trading range. Look for that to continue and then for wheat to break out in whichever direction corn ultimately goes.
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.