August 23, 2011
By: Craig Haugaard, Grain Origination Manager

Apparently this audience contains huge number of Meatloaf fans as we had an overwhelming number of you respond with Paradise by the Dashboard Light.  On the other hand it would appear that Julio Iglesias’s career as is dead as Bin Laden with only one person responding to that reference. 

CORN: 4 higher

During the session yesterday we traded higher as reports of projected yields seem to indicate that the crop has been hurt.  After the close the weekly crop conditions report seemed to verify that as the condition dropped 3% for the week down to a national average of 57% good to excellent.  It is also interesting to note that for the second week, South Dakota is the only state in which the crop rating is better than it was last year.  The 57% good to excellent number is 1% better than the number that was posted for this week in both 2006 and 2007.  In those years we ended up with a national average yield of 149 bu/acre in 2006 and 151 bu/acre in 2007.  As long as there is uncertainty in this market I look for it to continue to be strong.  Having said that we will have some down days along the way but I believe that now is a good time to sit tight and wait for the market to tell us when it is time to make another sale.  Right now all of my technical indicators are bullish and as you know; our old buddy Fibonacci is telling us that the next significant resistance is in the $7.80 area.   

SOYBEANS: 9 higher

When I did my meetings last winter I was very bullish but no more so than in beans where I sounded like a Mayan talking about 2012.  After a week-end of disappointing rains and a forecast that is reminiscent of the prohibition (very dry) the market moved higher on Monday.  After the close we had the weekly crop condition report and once again that tossed a little gas on what could eventually be a bullish inferno.  The soybean rating dropped 2% for the week and now stands at 59% good to excellent.  This is the worst rating for this week since 2007 when the crop checked in at 54% good to excellent.  That year we had a national average yield of 41.7 bu/acre.  Technically, all three of my indicators are bullish.  We will want to keep a close eye on the life of contract highs in the November futures.  It currently stands at $14.11 ¼ and while we have approached it several times we have not been able to take it out.  If we get up there again and run out of steam getting some bushels on the books would probably be a decent idea.

WHEAT: 8 higher

Wheat is focused on two events/concerns right now.  First, the ongoing antidotal evidence of disappointing spring wheat yields is weighing heavily on traders’ minds and helping to propel this market higher.  Secondly, the drought in the South West shows no signs of letting up and traders are becoming increasingly concerned that not only will we see a reduction in acres being planted this fall but in fact that we may be entering into a multi-year dry period.  There is nothing like a scared trader in an emotional market to get the bull running and that may very well be what we are seeing develop in winter wheat.  It wasn’t the greatest close in wheat yesterday but it was good enough to keep all of my technical indicators bullish both HRS and HRW. 

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.