September 13, 2011
By: Craig Haugaard, Grain Origination Manager

CORN: 5 lower

Now that we have the report behind us we can get down to trading the new numbers.  On Monday trading those numbers led to a wide range of prices as we traded lower before eventually turning and ending up higher for the session.  The variety of prices was enough that the bar chart generated an upside day higher.  With that formation I world look for corn to follow through to the upside again today.  After the close we had the weekly crop conditions report and oddly enough the report bucked the seasonal trends and posted a 1% improvement over last week.  This places this crop at 53% good to excellent, which still makes it the worst rated crop since 2001.  That year the final yield was 147.9, which is not far from the 148.1 projected by the USDA yesterday.  Of course, the trend line yield has increased by 16 bu/acre since then.  Here in South Dakota we continue to live in the proverbial Garden of Eden as we continue to be the only state where the crop condition is rated better than last year.  From a technical perspective the outside day higher on the bar chart is certainly good news and that type of formation has a very good history of following through with higher prices in the following days.  At the present time all of my technical indicators are still bearish but appear to be bottoming.      

SOYBEANS: 9 lower

With yesterday’s report actually increasing the national average yield I suppose the question to be answered is whether or not the USDA has fully accounted for the impact of the late summer heat and drought.  That discussion should be somewhat supportive to beans as will forecasts that have frost hitting the upper Midwest later this week.  With the November futures posting an outside day lower on the bar chart yesterday I suspect that we will see beans trade sideways to lower until we either get word of disappointing yields in the USA or run into planting problems in South America.  Barring one or both of those things happening, this market will probably be soft.

WHEAT: 10 lower

Yesterday’s report increased wheat production and stocks both domestically and worldwide.  When you break it down a little more you see that HRW carry-out is projected to be up 50 with HRS up 5.  The USDA will be releasing the small grains summary on September 30 and that report will give us the final wheat production numbers.  The report may also release an updated number for feed usage which in turn could impact the final carry-out number.  Right now the smart money is probably betting that the HRS yields will be reduced and that wheat feeding will be up.  All of this should result in a smaller carry-out projection in October.  The other thing to keep an eye on right now is the weather where it appears as if we have several days’ worth of chances at rain in HRW country.  While this would be welcome it is not expected to be enough to break the dry pattern that has persisted for months.  Technically, all of my indicators remain bearish for both HRW and HRS.

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.