September 14, 2011
By: Craig Haugaard, Grain Origination Manager

CORN: 5 lower

I was at a meeting yesterday where one of the speakers kicked off their comments by say, “Like your grandparents used to tell you, an ounce of prevention is worth a pound of cure.”  For some reason I found myself thinking, “No, actually my grandparents used to say, Shut the screen door dummy you’re letting in flies. Were you raised in a barn?”  Anyway that got me thinking about what other kinds of grandparent sayings could be used in discussing the markets.  I will try and weave in the ones I could come up with into today’s comments but if you have a favorite that I miss please feel free to send it to me. 

Many traders were caught with their pants down yesterday as stories started to hit the market that the yields in Illinois were better than expected.  It didn’t take but half a heart beat for the speculators to be on this market like white on rice and that in turn had many folks with long positions hollering like a stuck hog.  Traders may have been going off half cocked but we did see the funds sell 15,000 contracts of corn yesterday.  Most technical analysts have been like two peas in a pod lately and with most of them pointing to support in the $7.20 area we may be near a support area.  That is, if the good Lord’s willin and the creek don’t rise.  Of course, we still have fear of a frost out there and if that were to occur you could see the trade go hog wild and start buying contracts once again.  The other story is the impact of feed wheat on this market as the trade tries to determine a fair price for corn when compared to wheat prices.  If we get that figured out we could be in high cotton.  Anyway, as you know my technical indicators issued a sell signal last week and thus far are looking pretty accurate once again.  We know this market can change in two shakes of a lamb’s tail but for now, with harvest coming on and the early yields looking good the path of least resistance may be lower.  If you don’t have any sales on yet you may want to consider it.  I would hate for this market to go even lower and then hear you holler like a stuck pig because you missed out on the market.

SOYBEANS: 5 lower

Well, that was enough grandparent sayings for me but if I missed your favorite please send it to me.  As far as beans go we saw pretty good support in this market as there seemed to be more concern over the impact of a potential frost in the bean market than we saw in the corn.  Fears that the frost could cut into the yield coupled with a certain amount of skepticism over the increase that the USDA reported in Monday’s report should continue to be supportive to this market today.  Purely from a technical perspective all of my indicators are bearish and we are at a point in the year where seasonally one would expect the market to work lower.  I have Fibonacci support in the November futures at $13.75 and then additional support at $13.53.

WHEAT: HRS 2 lower HRW 6 lower

With world production and world stocks both projected to be up 6 MMT the trade has a real hard time getting excited about wheat right now.  Toss in the prospects for rain in HRW country which in theory may increase planted acres as well as help that seed germinate and you had the formula for a lower market yesterday.  With the increased world supplies this market will probably continue to struggle.  My technicals are all bearish and the charts don’t show much for support.

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.