November 5th, 2012
Lynn Miller – Grain Originator, Grebner
CORN: 7:50 Trading +2 ½
Fear and uncertainty seem to be the drivers in the market place as of late. No one really wants to be risk heavy coming into the presidential elections tomorrow. Fundamentally we have a rather unique situation setting up with Old Crop tightness and New Crop’s potentially bearish outlook. The more moisture that fronts like Sandy, and now the Noreaster, bring to drought stricken eastern cornbelt areas the better the outlook for the 13/14 crop potential. While, any shot of export demand from South American to the US would reignite the old crop bull and push prices higher forcing us to further ration corn use. But in the end, bearish technicals are winning the game for right now. The funds have sold 25% of their position in the past 10 days, no long 297,000 contracts. Currently all three signals are bearish the December with what we hope is solid support at $7.06.
SOYBEANS: 7:50 Trading -5 1/4
Fundamentally in beans, the story hasn’t changed much in the past 2 months. The US crop, though getting larger, is not large enough to pull stocks through to late spring/early summer without some serious price rationing. Even at these levels there is very little evidence of rationing and export loadings are running well ahead of this time last year, leaving us to believe the pace will continue. While on the flip side of the coin we have the potential to see 80 million acres of beans planted in the US next year. Just goes to show that nothing cures high prices like high prices. The trade is starting to watch the weather in S. America where it continues to be dry in Northern Brazil. Argentina has been the recipient of soaking rains, some 400% of normal, that are now causing planting delays. Though premature, we do need to keep an ear tuned in. Technically two of three indicators are currently bullish with support at $14.82.
WHEAT: 7:50 Minneapolis +4 ¾ Kansas City +4
Wheat appears to be trying to separate itself from row crops for the time being, focusing these days on world supply. Black Sea wheat is reportedly ‘sold out’ and grain prices around the world are rising making the US more competitive. Weather problems continue to plaque Australia. Forecasters now are looking for large US wheat demand to come in January. Technically all three indicators are bullish the Minneapolis by the narrowest of margins, looking to keep us within this sideways trading range we have established with resistance at $9.87. Same story in the Kansas City market with resistance at $9.57.