The headline of a Bloomberg article this morning probably says it all - Yen Slides By Most Since 2008 as Japan Resumes Intervention; Franc Weakens. The story reported that the yen fell by over 4% today and noted that the Euro was weaker as well.  The dollar is sharply higher as I write this and I suspect that at least initially we will trade these outside markets and not the grain fundamentals.  The Informa report comes out at 10:30 this morning and that could shift the focus.

August 4, 2011
By: Craig Haugaard, Grain Origination Manager

CORN: 12 lower

When the tide goes out you find out who has been swimming naked.  We have a bunch of different stories flying around right now.  Let’s focus on gazing into the crystal ball and guessing at the national average yield.  In July the UASDA gave us a 158.7 number to play with.  On Tuesday FC Stone came out with a 153.2 while another brokerage firm pegged it at 152.1.  We will get the Informa guess today and of course the new USDA numbers next week.  For the sake of argument let’s assume that we end up with a 153 bu/acre national average yield.  That would mean we would have to run the prices high enough to kill some demand and thus would move higher from these levels.  In fact, given the current profitability of ethanol plants some pundits are suggesting that we would need to take corn a dollar higher to kill enough demand.  On the other hand if the 158.7 that the USDA gave us last month is the real number the corn price is too high at these current levels.   So, watch for this market to continue to live and die with each weather report and for the budget woes of this great country as well as the rest of the world to influence the commodity markets from time to time as well.  Two of my three technical indicators are bullish with resistance in the December futures at $7.22 ¾ and $7.78. 

SOYBEANS: 15 lower

FC Stone has the bean crop pegged at 42.4 bu/acre which is a full bushel an acre less than the July USDA number.  We will get the Informa numbers today and the USDA’s next week.  Of course, August weather is crucial for beans so the trade will be especially interested in the forecasts and are already noting many areas that need water.  If we get a 42.4 this year and South America has even a hint of a production problem this market could take off.  For now, as mentioned yesterday if we can take out the old contract highs at $14.11 the magic number in November beans becomes $14.54.  If that doesn’t happen this market will continue to chop in the same trading range we have been in for months.  Right now all three of my technicals are bearish although in a choppy market they are not as reliable.

WHEAT: 10 lower

The crop in Russia seems to keep getting bigger and they are not showing any signs of backing away from their aggressive export program.  Egypt is in looking for wheat this morning but in all likelihood will buy it from the Black Sea region.  Here in the USA it appears as if the price direction of wheat will be determined in large part y what corn does.  Look for wheat to continue in its subservient role for the time being.  Technically, two of my three of my indicators remain bullish

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.