Corn: Most of the trade was going into Monday morning expecting funds to come in buying once again to start the year. It is harder to believe in that line of thought when the floor already estimates trading funds to be long 400,000 contracts of corn.
What little support corn had to start the day was following wheat higher. Within only a few minutes of trade the smaller speculators gave up on funds when they were not heard from. For the rest of the day, corn was subject to light selling while being stuck between the higher wheat and lower beans.
Going into the close was the last chance to find fund buying and once again trade was disappointed, selling into the close. In all, even with the setback, this bullish March contract looks to come away with no chart damage…Ryan Ettner
Soybeans: One thing we have to keep in mind is Argentina is still primarily a corn story. The corn crop is currently in pollination. It is the equivalent of July to them. Soybeans down there will not get into flower/bloom until February.
Though damage has been done there is still the possibility of rains this month helping soybeans out. That could be one reason why this morning’s much milder temperature forecast helped to take some steam out of the beans. Temps were in the mid 90’s last week. This week they are now seen in the upper 80’s for the most part.
Next week, USDA will have a tough decision to make. In both November and December they thought a good estimate for Argentine soybean production was 52.0 million tonnes. We have both the Rosario Grain Exchange (49.5) and two private analysis groups that are sitting with lower numbers…Rich Nelson
Wheat: The first trading day of the year had the bulls smiling. The trade was expecting with the New Year that new money would come into to markets. For most of the commodity markets, it looks like the money did not show, but it did show in the wheat pits.
There are two events that were drawing money to the wheat market. The first is the record flooding that is affecting Queensland, Australia. The press is reporting that the area that is affected by flooding covers an area larger that the countries for France and Germany combined. This is devastating for Australia as a whole, but production wise, most of the wheat from this part of the county has been harvested.
Also, Queensland production areas make up only about 5% of Australia’s production. As for the rest of Australia, their forecast is drier and will allow them to finish up their harvest…Jim McCormick
Ryan Ettner is a registered commodities broker and grains analyst at Allendale, Inc. Steve Georgy is a Sr. Broker/Manager at Allendale, Inc. Jim McCormick is a Sr. Broker at Allendale, Inc. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com.