Corn: Monday saw active selling as trade was looking for a 93% to 95% corn planting pace on the afternoon. Back that up with a good near-term forecast calling for heat and sun over the next three days to help planters move. At the moment, the forecast looks just about ideal, with heat helping to grow crops in the ground or dry soil for areas; it isn’t followed by a cooling off and rains by end of the week.
If we mix those fundamentals with the technicals, Monday's setback was perfect for new crop. December corn support was 665 coming into the week, allowing for a small window of a setback while still looking strong. The setback right on 665 support shows that there is plenty of support due in this market when it is put to the test. To show how good support was, and can be expected in the future, December corn traded at 665 for six minutes while wheat, beans and other months of corn were all making new lows.
Looking ahead to Thursday’s report is tougher to do than you might think. Normally, the USDA does not change yield or acreage on this report, but once in a while they will. Because of that, carryout estimates for this report vary widely. Some analysts change the yield, some change acres and some change both. Last month, USDA suggested new crop ending stocks would be larger than expected at 900 million bushels. Estimates for Thursday’s report range from 520 to 950 with an average guess of 771 million bushels.
Most do look for this report to be bullish but with the number of potential wild cards in this report, if you find yourself with long profits leading into it, it might be best to just take them before seeing the numbers. Hedgers need to have a plan ready to put in place, as always…Ryan Ettner
Soybeans: Beans fell apart as traders focused on weather Monday. Traders are watching the maps which show above average temps mixed with lack of rain. This is a great opportunity to plant. Funds also took profits from a three-day rally as they sold 7,000 contracts. This pushed the July 31-1/4 cents lower. The decline in crude oil and the strength in the dollar helped pressure the markets as well. No major news to report on as the market gets ready for the USDA report this Thursday. Crop progress came in at 68% planted. The trade was looking for 69% planted. The previous year was 83% and the five-year average is 82%. We feel this is neutral for the overnight trade…Steve Georgy
Wheat: General liquidation pressure hit wheat. Some G20 agriculture leaders are attempting further movements against commodity speculation. One report, released by the UN, even suggested governments should consider direct intervention. Wheat would be the most affected of the grains as every nation in the world is involved in production. This suggestion does concern us at this time…Rich Nelson
Ryan Ettner is a registered commodities broker and grains analyst at Allendale, Inc. Steve Georgy is a Sr. Broker/Manager at Allendale, Inc. Rich Nelson is Director of Research at Allendale, Inc. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com.