Bulls move into corn, soybean markets

Grain & Oilseeds Report

Corn: For the short term, the bulls certainly look to have most factors in hand. Bulls should be even more excited that carryout was able to move lower without taking anything away from acreage.

Both bulls and bears might lay low until we see if fund selling continues Tuesday, however. If funds are here, the bears will likely see this as a bounce to sell. If funds are quiet, then more bulls are likely to come in with additional buying, becoming more confident with each day the funds are quiet.

Neither side should expect fund short covering just yet. Today’s 1.837 carryout number is still not small and is unlikely to cause any large scale short covering just yet…Ryan Ettner

Soybeans: The soybean market was in a rally mode even before the USDA report showed a bigger than anticipated drop in soybean yields. An announced sale of 713,000 tonnes of new crop beans to China and an additional sale of 140,000 tonnes of new crop beans to an unknown destination added to the pre-report bullish tone.

The most recent weather forecast was also seen friendly as there just isn’t much rain in the forecast for the Midwest over the next week to ten days. Some heat is also forecast to move back into the Midwest by the end of the week. With the soybeans at critical stage, rain is needed to get the maximum yield potential from the plant. Estimates are that up to 25% of the bean area is short of soil moisture at this time.

Crop rating released after the close showed the 64% of the crop was rated good to excellent. The trade was looking for rating to remain steady to dropping 1%. With weather looking friendly, a bigger than anticipated drop in soybean yield and ending stocks dropping to a friendly 220 million carry out number the market bulls may gain control of the market at least temporally.

Key resistance points for the market are 12.28, 12.46 the 12.78. A move to the $13.00 level looks like a selling opportunity at this time…Jim McCormick.

Wheat:  

  • Weekly wheat export inspections came in at 23.789M bu, which was in line with expectations ranging from 20-25M bu.
  • Taiwan Flour Millers Association issued a tender for 101,500 tonnes of US wheat, which ends on August 15th.
  • USDA came out with US wheat ending stocks down from 576M bu to 551M bu for August.  Total wheat production was left unchanged at 2.114B bu for 2013/14.  Overall, the friendly US ending stock number was overlooked on a large global wheat supply.
  • The French farm office has increased its estimate for 2013/14 wheat production to 36.1 mmt, up from 35.9 mmt.
  • The world wheat crop increased from July’s number of 697.8 mmt to 705.4 mmt on today’s report.  Wheat prices could see limited upside as global wheat supply continues to rise.
  • September Minneapolis wheat rallied up to the downtrend line, but was unable to break through as it settled almost 10 cents off the high… Alex Bassett
About the Author

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 Senior Broker/Manager at Allendale, Inc. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com

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