September 19, 2011
By: Craig Haugaard, Grain Origination Manager

CORN: 6 lower

The headline of one article that I read this morning was Europe digs ever deeper debt hole.  This has the dollar higher this morning and I would expect the outside market to put pressure on grain prices today.

A steady stream of harvest reports indicating better than expected yields came freely flowing out of Illinois and Missouri on Friday and this in turn brought selling pressure into the market.  Once we traded the December futures below $7.00 we saw additional technically driven selling come into the market which kept the market soft right into the close.  As we sit there this morning we are in the seasonal time frame in which one would expect the market to trade lower, all of my technical signals are in bearish mode and, as you can see on the following chart, the next significant level of Fibonacci derived support doesn’t come in until $6.77 with a more significant support level at $6.53

SOYBEANS: 8 lower

As we discussed in this space on Friday, the FSA numbers that were released on Thursday may indicate that the final acreage number for soybeans may be up to 400,000 less than the current USDA number.  While the FSA numbers got a little attention on Friday the real attention grabber was the reports of better than expected yields.  Technically, all of my indicators are negative and as you can see on the following November futures chart we are right smack dab against a level that ought to offer significant support.  If we get a close below $13.53 I don’t see any additional support in this market until we get to $12.84.  If you have been digging in your heels and not selling because the market is dropping you may be getting set up for the market equivalent of an atomic wedgie.  If you are going to put your beans into on farm storage you may turn out fine but if you have beans that will need to come to town at harvest time you probably ought to be getting an itchy trigger finger. 

WHEAT: 7 lower

The FSA numbers looked bullish when they were released last week but it quickly became apparent that the trade really could care less at the present time.  We saw another Black Sea area wheat sale into the export market and it was distressing to see the wheat trade for $12/MT less than the previous sale.  Speaking of export sales, putting additional pressure on the market last week was talk circulating through the trade that we may have as much as 10 MMT more wheat coming into the export channel from non USA sources.  Folks, at the end of the day, in spite of what we have going on domestically, there is a lot of wheat in the world and this will probably keep pressure on the wheat market.  My technical indicators continue to be bearish for both Minneapolis and Kansas City futures.  Looking at the chart, Minneapolis December futures should have solid support at the $8.43 level so perhaps we can get a bounce up from there.  If that level doesn’t hold then I think you could project the futures prices to sink as low as $7.75.

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.