October 7, 2011
By: Craig Haugaard, Grain Origination Manager

CORN:  open should follow the overnight close

I needed to be on the road before the overnight market closed this morning but look for the day session to open in line with the overrnight close.  At the end of the day all this market did yesterday was run on a tread mill as it ended up unchanged for the session.  It appears as if the market is consolidating after the beating it took the past couple of weeks.  The trade seems comfortable, at least for the time being, that the lows of $5.75 will provide substantial support and I would look for them to be buyers if we see the market dip back to that level.  Next week we will get a fresh set of USDA production projections and I would not be surprised to see the market consolidate between now and the report on October 12.  Also providing some potential support is the lingering idea that China is going to come into our corn market as substantial buyers at some point in the not to distant future.  Two of my three technical indicators are bearish. We have the aforementioned solid support at $5.75 in the December futures and if we assume that level will be the low for this move the Fibonacci numbers would suggest resistance in the December corn futures at $6.52 level. 

SOYBEANS:  open should follow the overnight close

When the Informa report failed to increase the size of the projected national average yield it threw some real confusion into this market.  I was heard an older guy say, “I am so confused I don’t know whether to scratch my watch or wind my butt.”  That probably comes close to summing up the level of confusion in the bean market right now.  Reports of better than expected yields drove this market lower but now the trade is hearing some stories of less than desirable yields coupled with the Informa guess will probably keep this market chopping until the October 12 report.  News out of Brazil yesterday was also slightly supportive with that government placing the projected yield at 72.1 to 73.2 MMT, below the 73.5 MMT that the USDA has been projecting.  For the time being my technical indicators are remaining bearish and this acts like an uncertain market that is consolidating.

WHEAT:  open should follow the overnight close

Word that Ukraine is looking at cutting export taxes put pressure on the wheat market.  If in fact Ukraine does lessen their export taxes it will make them even more competitive in the world export market which in turn is probably bearish wheat prices. We still have rain in the forecast for drought stricken HRW country.  Overseas, Australia is getting good rains which are improving the prospects of that crop while Ukraine is also expected to get beneficial rains this week-end.  My technical indicators are looking very oversold with two of the three still bearish for both HRS and HRW futures.

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.