Join the discussion.
David Miller
Producer/Director
Market to Market
Sue Martin On the Markets — Join In!
- There are no trackbacks for this post yet.
Leave a Reply
sponsor:
Latest Blog Posts
Archives
Categories
sponsor:
Join the discussion.
David Miller
Producer/Director
Market to Market
sponsor:
sponsor:
Wow! The corn and soybean market really bit the dust today. I alluded to the $4.08 area as resistance for Dec corn and Friday we seen that resistance hold and follow through today with more selling. Some of this selling is month end window dressing by the funds, but, anticipation of moderating weather patterns next week and possibly through November pulled some of the weather premium in these two markets out. Technically, corn was very over bought and our preliminary “floater” indicator turned negative on corn and wheat and soybeans on Friday’s close. Today, the “timer” turned negative on corn as well. What does this mean? The market should see lower lows tonight and possibly tomorrow morning and then a potential “turn around Tuesday” effect to give a small bounce. This bounce should more than likely, fail and give way to a further decline for Dec corn and other contract months. Still, the weather will be more helpful towards soybeans as they do not do well standing in the field during the winter and, demand is so front-end loaded. There are close to 31 ships waiting to load soybeans. Delta soybeans are in need and normally would have already been loaded onto ships making their way back to China. Rumors today of China rolling 3-4 cargoes of soybeans into Jan/Feb had traders selling. Dec corn should take out 369.25 and Nov soybeans should try taking the $9.65 area out. I look for 9.76 on Nov soybeans tonight/tomorrow and the $3.72-3.74 on Dec corn. Then a bounce? Cattle should try to rally tomorrow.
In my area, west central ohio, corn has weak stalks due to stalk rots. In addition, corn is very wet( around 25% ). Yields seem high, but the inability of dryers to handle this wet corn on farm as well as at elevators has seriously slowed the pace of harvest. I wonder if this a local problem, it seems to have little impact on the market. Sunny dry days are of little value when you cannot utilize them.
I know there is currently a large global wheat surplus and supply substantially outstrips demand. However, in light of the magnitude of the delayed corn and soybean harvest, I am wondering if there is any wheat getting drilled in the Midwest. Today’s crop report didn’t suggest anything to support this notion but as I drive through Illinois I have only seen one drill in the fields this Fall near LeRoy, IL. Will this phenom become more evident in later reports and do you think there will be some substantial upside in CBOT wheat after the first of the year when the first planting intentions report is published?
Corn continues to maintain high moisture in some areas. 28-31% common. Yet, long lines at the elevators and down time due to extended drying time will continue to bring this corn harvest pace on slowly. Hedge pressure should be spread out. Still, there is corn being harvested and some is drying down nicely with the above normal temps and some breeze. I heard of some farmers now bringing in corn at 15-20% today. The wheat market is dealing with an open interest that is equal to times the crop size. A market that has been bearish for some time and yes world stocks appear huge. However, futures are just that futures. China has been seeding clouds and has 8 major wheat and rapeseed producing provinces that are enduring water shortages and dryness. Henan, a very large producing province, has gone 105 days without rain and the driest since 1951. Last week, China purchased SRW from the US. Another symptom that not all is going well regardless of what the Chinese media would have us believe. I heard today that the Ag Ministry is on red alert. Argentina did not get all the wheat seeded again this year compared to normal. So, with a market loaded short, this market could offer something better for cash sales. Just be willing to part with the wheat when the time comes. Even if wheat does get planted, yields should suffer due to the time of season being planted? I suspect this will show up in further supply and demand reports as the USDA adjusts acres planted.