January 24, 2012
By: Craig Haugaard, Grain Origination Manager
CORN: 4 lower
Disappointing rains were the main feature of the trade yesterday. Also helping the cause was continued fears over the Iranian saber rattling which had crude oil trading higher for the day. The crop continues to deteriorate in Argentina with some traders now postulating that their corn production could end up being down as much as 4 MMT from the current USDA projection. That is the old crop story while new crop will eventually be defined by the Ag Forum and all expectations are that we will have the type of projected carry-out that has been associated with sub $4.00 futures in the past.
Technically two of my three indicators have turned bullish for old crop corn while all three remain bearish on the new crop. In looking at the Fibonacci numbers it would appear as if the next level of resistance in the March futures should come in at $6.20 with more substantial resistance at $6.37.
SOYBEANS: 7 lower
The lack of rain in South America really ignited the bean market yesterday. With the dry pattern expected to persist I am seeing some analysts projecting eventual harvest numbers that are down sharply from the most recent USDA numbers. If in fact the projections that I am seeing turn out to be true we could very well see world oil seed stocks drop 10% from year to year.. If this turns out to be the case I would argue that the trade will try to buy in additional acres here in the USA and if that is to occur smart money would say it has to happen in February. Fasten your seat belt and hang on, the next few weeks could be a riot.
Technically two of my three indicators are bullish in both the old and new crop futures months. Look for next two resistance points in the November bean futures at $12.08 and $12.33
WHEAT: 3 lower
Stories of dust storms in HRW country coupled with the news that the wheat offers coming out of the Black Sea region are now being offered at higher p[rice levels helped move wheat higher for the session yesterday. It is interesting to note that there is even some fear that the FSU may default on some of the wheat sales that have been made out of the Black Sea region. Of course it also helped that corn was higher for the session as well.
Technically two of my three indicators are bearish for both old and new crop in both the Minneapolis and Kansas City Exchanges.
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.