Corn: Sideways is the pattern that continues. This market is currently too concerned with frost to allow for a hard sell off. At the same time it is too concerned with record yields to allow for a rally. Today showed trade that could argue for both sides. There was talk of a possible light frost over the weekend and we came away with temperatures getting down to 35 degrees with no damage. That was what corn needed trade 6 lower shortly after the opening. Late in the day corn began to come back and even trade a couple higher. When it was all said and done December had a last trade of even on the day. One thing that was more than evident today is that the correlation between crude oil and corn was zero. With crude having a sizeable sell off and corn trading even it shows that grains are trading grain fundamentals and not outside markets. It will be weather and final yield numbers that will direct this market until final numbers can be more accurately estimated. If you are working the earlier calls we have listed then there is still time left to buy the last frost risk call but allow it to come down to our price. Tomorrow, we will add some comments showing how strong corn is correlated to crude these days.
Soybeans: Overnight saw the Chinese stock market fall hard and that quickly spilled over to the bean market. At the start of the day trade speculators were sellers on this news taking this market even lower. There are two major ranges that beans have traded in recently. One was right after the sell off by the funds in spring and the other one after breaking out and giving us chances to hedge as high as 1050 (or 1066 if you were up in the middle of the night). Today’s last trade puts this market almost right in the middle. This market has been volatile between those ranges which allowed for a steep drop off with little support overnight and during the day. What will take more effort is getting back into either the lower range which we expect to be in during harvest or the higher one that briefly gave us chances at hedging. Beans are less likely to be concerned with frost now. After not seeing a frost this last weekend and the next frost forecast not coming up until the end of September we have one crop that should no longer need to worry about that factor. Now it is just down to yield and much of what we have heard is that even the fields having shorter beans are looking to have a good number of pods. Tomorrow, we will add some comments showing how strong soybeans and soyoil are correlated to crude these days.
Wheat: While corn and beans are not being influenced by outside markets at the moment it is evident that wheat still is. Given its global market nature it is not uncommon to find wheat following the dollar. While there was some support found from that market the fact remains that we did make a lower low than Friday once again showing this market is in a down trend. We are working a sold order and the key is that we keep our stops far enough away not to get stopped out on one day’s news and stick with the over all trend. Tomorrow, we will add some comments showing how wheat was tied strongly to the US dollar for most of this year…Ryan Ettner
Ryan Ettner is a Grain Analyst and Registered Broker 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
