Allendale Wrap-Up 8/1/2009
Corn: To start the week, it appears the market has decided to split the difference between what was first lost from yield estimates as high as 161.9 and what was gained from acreage guesses as high as a 2 million acre reduction. This balance could lead to a sideways pattern short term and agrees well with our trade ideas. We want to be sellers of corn above the current levels in case there is too much focus on acreage and our objective is a correction for when yield talks take hold.
Soybeans: As was mentioned Friday, there is some talk about how many acres may be increased to beans that are taken away from corn. Our current thoughts remain that will be a non-issue as not enough acres will be shifted to cause much of a difference. Trade today would suggest differently however. A small correction was made in new crop beans that may have reflected some concern about an addition to acreage. As also can be seen, a move lower in beans shows very little real concern at this time.
Wheat: Spring wheat helped other markets to trade higher today by seeing some buy orders finally showing up for a day. There is no doubt that the trend is still lower in this market and the upcoming spring harvest will do little to add support. There is a belief that there are large amounts of old crop wheat still on farm not allowing enough room for what is about to come in about a month when harvest starts. This could mean that selling will be active on any rallies.
Ryan Ettner is a registered commodities broker and grains analyst at Allendale, Inc. in McHenry, IL. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com
