December 22, 2011
By: Craig Haugaard, Grain Origination Manager
CORN: 1 higher
It would be a bit simplistic to say that the markets are a one trick pony these days but the hard cruel fact is that the attention of the trade is glued to South America. Yesterday a series of pictures taken of the corn crop in the state of Parana in Brazil made the rounds and fueled the bullish fervor. A couple of the pictures are included below for you viewing pleasure. Parana is the second biggest corn producing state in Brazil and thus is critically important.
All of my technicals continue pointing higher. We closed through my first resistance level of $6.15 basis the March futures yesterday so my nest target becomes $6.39.
SOYBEANS: 2 higher
Beans are being run by weather as well. As you can see on the following map we saw record high temperatures in critical portions of South America yesterday. My technicals are all pointing higher with resistance in the March futures at $11.76 and $12.20.
The one thing to keep an eye on in the midst of this bullish enthusiasm is the slow pace of exports to China. With South American grabbing a larger portion of that business we are now seeing some analysts projecting that our ending stocks may actually be as large as 300 million bushels.
WHEAT: 1 higher
Wheat came along for the ride once again yesterday. Left to its own merits it would probably be trading lower. The one thing it really has going for it is that we are getting close to the time period where the reallocation of funds will take place and the conventional wisdom is that they will need to buy back a bunch of their short position. For now my technical indicators are bullish. Looking at the March Kansas City futures I would expect to see resistance to this move come in at $6.83 with additional resistance at $7.13. I would be looking for a potential rally as funds buy back short positions in the next few weeks as a selling opportunity.
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.