January 4, 2012
By: Craig Haugaard, Grain Origination Manager
CORN: 1 higher
When my kids were little they could, at times, be little jerks. One of the things that irritated me the most was when one of them would try to tell something to the other one and the one they were trying to communicate with would go, “Na, na, na,na, na…., I can’t hear you.” I think that might be these markets right now. What’s that you say, “Crude oil is lower and the dollar is higher.” Na,na, na, I can’t hear you. (It just occurred to me that today’s comments will be viewed either as proof of my brilliant insight or else further proof that I am ready for the tight jacket and rubber room. Na, na, na? Really who writes that kind of crap.) Anyway I don’t think anything matters to this market right now and in fact the market can’t “hear” the other noise because they are so focused on the drought in South America. Until that runs its course I don’t think much else matters. Having said all of that I will now note that my technical indicators are all strong and long. I would expect the next level of resistance in the March futures to come in around the $6.75 area while in December 2012 futures look for it at $6.00.
SOYBEANS: 3 lower
You guys already know the South American story so I am not going to speak of it in this space this morning. Instead I would like bring a couple other items to your attention:
1) Monsanto is saying that cotton acres will be down 15% which, if true, would add 2 million acres to other crops and I am willing to bet my next child that most of those acres will end up as soybeans.
2) Cumulative export loading are currently running 30% behind last year. The USDA is projecting that we will be down 14% for the year so we need to see the export pace pick up.
3) Some of the technical indicators are looking over bought and may be in need of a technical correction.
At the end of the day all of this is still trumped by hot and dry. With funds only long about 40,000 contracts right now there would appear to be plenty of buying power left to come to this market should they so choose.
WHEAT: 1 higher
Wheat continues to tag along with corn. We are seeing some better crop conditions coming out of Kansas and Oklahoma which may be negative. The speculation is also ongoing about the impact of the demise of the Canadian Wheat Board. Does that open the door for more wheat to move down into the USA? If so that could be long term negative to the Minneapolis futures. From a technical perspective two of the three indicators are bullish Minneapolis wheat and Kansas City futures.
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.