Corn: Our 520 price objective for December futures was reached Monday, and then the market sold off. While that would embolden some to suggest we have a top in here, given the size of this rally, one rejection day is not enough. Another issue to speak of when looking for a top is that the last leg of higher prices can sometimes be made of old short positions getting out (rather than new interest in going long). At this time, as of Friday, open interest continues to show new blood is entering. Another feather that bulls can put in their hat is the forecast for freezing temps in China. That risk will run through Thursday morning…Rich Nelson
Soybeans: Monday morning started off with good volume buying once again, which is more fund money flowing into the beans. We have heard different stories as to fundamental reasons for this run up. One talk is how Argentina is expected to turn dry. That talk sounds familiar to what was being forecast here for late summer. Just ask someone from Iowa what they think about this dry forecast that was supposed to be found for late July and early August. To us, it looks more like speculative trade than anything fundamental. One would think that in the fall it would be yield reports that hold the most weight. A problem with that train of thought is that we are hard pressured to find disappointing bean yields at all. Some producers who reported early disappointing yield reports for corn have mentioned that the bean yields helped to bring back some lost revenue…Ryan Ettner
Wheat: Like Friday, the wheat pit was again the weak sister on Monday as we saw a round of profit taking. Wheat saw pressure after hitting a six week high in early dealings. Support for the markets continues to come from outside market forces “fund buying” and concerns about the potential tight world food supplies. As for the big frost, the market was worried about for Canada, it seems to have come and go with just some quality damage being done…Jim McCormick
Jim McCormick is Sr. Broker/Analyst at Allendale. Ryan Ettner is a registered commodities broker and grains analyst at Allendale, Inc. Rich Nelson is Director of Research at Allendale. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com.