November 15, 2011
By: Craig Haugaard, Grain Origination Manager
CORN: 3 higher
I was out on vacation last Friday as well as yesterday but it does not appear as if much changed while I was way. The first thing that jumped out at me was a CNBC headline from yesterday afternoon that reads; European Debt Crisis: You Haven't Seen Anything Yet. I suspect that this will continue to be a story and the net result may well be a stronger dollar which should translate into weaker commodity prices. You have to also ask yourself if Europe can get into further trouble and yet the USA avoid a double dip recession? I don’t know the answer to that but it strikes me as unlikely. In the actual fundamentals of corn we will continue to have relatively tight supplies especially as opposed to what is projected for 2012/13 and that should be somewhat supportive to the old crop. The fact is that old crop corn supplies are down 5% from last year and if farmers hold tight this could result in higher futures prices as well as a stronger basis in coming months. The other stories remain the abundance of feed wheat around the world as well as additional competition in the export markets from countries such as Ukraine and Argentina. Technically, all three of my indicators are bearish with Fibonacci support at $6.30 and $6.08 basis the December futures.
SOYBEANS: 14 higher
The crush is running behind last year’s pace as are exports. In South America we now have the crop in Brazil 75% planted and with good rains in the forecast that region of the world appears to be getting off to a great start. One private analyst is projecting that we could see bean prices sink to $9/bu. That seems extreme to me but does help point out the dangers of the current lagging demand. Technically, we found support in the January futures pretty much right where Fibonacci said we would and now are bouncing a little so that is encouraging.
WHEAT: 1 higher
Weekly exports were poor and the cumulative loadings for the year are now running 4% behind last year’s pace. The winter wheat ratings improved by 1% in yesterday’s report with a good chance for rain in HRW country next week also seen as having the potential to continue to improve that crop. In Ukraine it appears as if the drought is continuing with 31% of that crop rated as poor due to drought conditions. We continue to have good world supplies and cheap Black Sea wheat in the export markets which should keep a lid on the wheat market. Technically all three of my indicators are bearish KC HRW while in Minneapolis futures two of the three are bullish.
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.