December 2, 2011
By: Craig Haugaard, Grain Origination Manager
CORN: 1 higher
As we get ready for today’s session to open I see that the dollar is a little lower, crude oil is higher and the S & P futures are trading higher so the outside markets would tell us that we should have a better opening. The corn fundamentals themselves are a little mixed. Exports continue to struggle. Weekly exports yesterday were pathetic and for the month of November it appears as if exports will total 1.05 MMT which is well down from the 3.91 MMT posted for November last year. We have been looking for China to ride to the rescue so I thought it was interesting to see the Chinese Statistics Bureau now projecting a record corn crop of 191.7 MMT. If true this would be 7 MMT more than the USDA is projecting and a huge 14 MMT increase over last year for them. On the bullish side of the equation for corn ethanol demand continues to be very strong. As we sit here this morning it appears as if the increased ethanol demand and the decreased export demand may be a wash. Technically, two of my three indicators are bullish. Looking at the Fibonacci retracement numbers I see that we have resistance in the March futures at $6.22.
SOYBEANS: 5 higher
The total exports sales of beans thus far this year are running 35% less than last year with the cumulative loadings 33% behind last year’s pace. Since the USDA is projecting exports to be down 12% for the year we obviously need to pick up the export pace or see the USDA decrease their export projections. I suspect we will see a combination of both of those factors. In South America the dry areas now have some rain in the forecast so I think we need to continue to assume that they will have an average crop down there this year. Technically, we are still trading within the range that was established in Wednesday’s wild market. It appears as if this market is consolidating before it makes its next move. Hard to tell what direction that move will be in but as I we get ready for the open this morning I must note that two of my three indicators are bullish, even if just marginally so.
WHEAT: HRS 3 higher HRW 3 lower
Weather seems to be pretty good around the world with HRW country here in the USA forecast to get rain. The wheat growing areas of china as well as key portions of the EU and FSU are also projected to get some needed moisture. In Australia it appears as if the rains may let up so they can finish harvesting that crop. The pother interesting tidbit of news is that based on what I am hearing about the quality of wheat Russia is now offering into the export market they may have already sold as much of their good quality wheat as they were planning to with the recent offerings being lower quality. I had mentioned in this space a few days ago that perhaps the most positive thing for wheat was the fact that the funds were heavily short and needed to buy out of at least a portion of that position. We have seen that activity the past couple sessions and it has definitely aided the wheat in staging a rally. Technically, two of my three indicators are bullish both the Minneapolis (HRS) and Kansas City (HRW) futures. I don’t know if it means anything but I should note that the moving average for Kansas City March futures is at 666 as we get ready to open today’s session.
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.