December 29, 2011
By: Craig Haugaard, Grain Origination Manager
It is a wacky world these days. We have the saber rattling in the Strait of Hormuz where Iran Naval Chief said yesterday, “Closing the Strait of Hormuz for Iran's armed forces is really easy ... or as Iranians say, it will be easier than drinking a glass of water." In spite of this crude oil was lower for the day. The dollar was sharply higher and that usually pressures grains but yesterday that was not enough to keep grains down. I even read yesterday that the cruise that has been designed to re-create the cruise of the Titanic on the 100th anniversary of its sinking has sold out. What a world we live in. Yesterday the only thing that matter to this market seemed to be drought in South America. War clouds in the Middle East and a surging dollar were not enough to dampen the bullish fervor of traders who smell a good old fashioned weather market. Pictures, such as the one below, were once again making the rounds of a tough looking corn crop in Brazil and that is all anyone needed to see to be bullish. As long as the trade is going to push this market higher on drought fears I think it just makes good sense for us to go along for the ride. I will be watching my technical indicators for a sell signal when this thing runs its course but right now my indicators are all long and strong. So, enjoy the ride but be ready to take some money off the table when it looks like it has run its course.
SOYBEANS: 10 lower
After a sharply higher day on Tuesday we had a little profit taking yesterday. We also are seeing traders who believe that the stage that the corn is in makes in more venerable to drought while beans still have a little more time for the rains to come back and make a crop. Having said that it is still interesting to look at the following pictures of Argentina and see what the December moisture picture looks like and how that lines up with the bean producing areas of that nation. My technical indicators are all still bullish and I suspect that patience will still be rewarded with prices higher than the current levels. It is probably worth noting that the March futures basically traded right up to the full 61.8% Fibonacci resistance level yesterday and then backed off. I don’t think this market is over but that was an interesting action. In fact, the chart is so cool that I am including it as well for your viewing pleasure.
WHEAT: 2 lower
Wheat tagged along after corn to post a higher close. The Chicago futures performed the best as traders fear that the fund re-allocation which should start next week may bring a round of buying into the Chicago wheat futures. My technicals are bullish for all three wheat futures markets with next level of Fibonacci derived resistance in the Minneapolis September futures coming in at $8.08.
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.