Corn, soybean, wheat traders need to watch these factors

Grain & Oilseeds Report

Corn: December took out 480 resistance, which now leaves 490 as the next chart level to offer a slow down to the bounce. While this week’s tour is going to suggest general support, this week we will want to watch the forecast changes closely. With a forecast this dry, any additional rain will cool off the buying seen today. Bulls have the current crop tour, weather forecasts and fund short-covering on their side. Momentum seems to have shifted quickly to the buy side in the short-term outlook. Current crop tours will likely lose their bullish influence by Friday.

With funds short-covering, the bears now look to have lost fund trading as a bear influence on this market and will need a quick change back to a wetter forecast to resume the downtrend. Monday’s trade suggests that the next resistance of 490 will almost certainly be tested with 500 the next big number to watch out for this week. More than likely this will be a bull week, but be careful to expect a major rally as even the current crop testing is not finding bad yields so it is hard to expect a final survey number to suggest a longer-term bull run higher…Ryan Ettner

Soybeans: The trade was anticipating that the good-to-excellent crop ratings would drop 1-2 points Monday night due to the heat and dryness seen last week. Ratings released after the close showed that the good-to-excellent rating fell 2%, coming in at 64% good to excellent. The five-year average for ratings this week is 57% good to excellent.

Soybean inspections came in at a positive 5.294 million bushels above the 1 to 3 million bushels the trade had been expecting. We would anticipate the bean market will continue to find support on breaks due to the dry forecast.

With the market closing above the July high, it opens the door to test the June high of $13.33. Keep an eye on the weather maps. If they start show temps cooling down and increasing rain amounts and coverage, the market could see a pretty severe selloff due to the market being overbought after the past 10 day's rally….Jim McCormick.

Wheat:  

  • Weekly wheat export inspections came in at 33.79M bu, which is much better than the average estimates ranging from 20-24M bu.
  • Analysts have raised their estimate for the 2013/14 French soft wheat crop to 37 mmt, which is higher than the French Farm Ministry’s estimate of 36.1 mmt.
  • A recent Reuters poll shows the average estimate for Canadian wheat production will total 30.4 mmt, which would be the largest crop since 1991 due to favorable summer weather.
  • The wheat complex finished higher today as a strong market corn market was able to support the wheat market. However, gains were limited as the global wheat crop continues to grow to due favorable growing conditions.
  • September Chicago wheat gapped higher overnight and settled near the highs as dry weather rallied the corn market.  Next point of resistance will be 652’2… 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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