Corn, soybeans, wheat take on bearish tone

Grain & Oilseeds Report

Corn: Soybeans saw a major turn in the forecast for Argentina Monday morning, which took away all sympathetic support that corn had for the last couple weeks. Despite all the recent bounces in beans and wheat, corn hasn’t managed to find much of a bounce for bears to sell from, much less feel threatened.

Last week’s solid exports couldn’t find support in this corn market at the 440s, which was a clear sign that the easier direction for this market was lower. Monday December hit new fresh lows, posting a low of 430-1/4, which is just 1-3/4 cents below the recent 432 low. Once again, while this market has the easier direction lower, major support is seen once new lows are made. That support will continue to be expected as corn bulls will see each new low as another chance for China or some other buyer to come in with another major purchase.

This is why we will continue to expect just a slow grind lower for this market. Trade estimated today that harvest progress would come in 52% complete, which is still short of the 70% number where trade feels harvest is “complete.” For corn bulls the next chance for a comeback could be as quickly as tomorrow. With December at fresh lows, it could be a buying opportunity for those looking for major sales to be reported on Thursday. Keep in mind that the Thursday sales report will update two more weeks of sales for when the government was closed. Corn bears might have to take a day off as selling at recent lows has not been successful lately. Obviously, the trend suggests that bears can jump in with quick selling of any bounces around 440…Ryan Ettner

Soybeans: Producers should look to move grain right out of the field and re-own on paper in the deferred months if they want to maintain a bullish stance in the market. Thursday, the USDA is scheduled to report the rest of the October sales, and this should catch them up on the export news from when the government was closed. Most in the trade are anticipating for these sales to be monstrous.

Once the demand news is out of the way, the bears may have a chance to growl even more than they did Monday as on Nov. 8, the USDA will give updated yield estimates. Most in the trade are long for the crop yields to get bigger as the common theme to this year’s harvest has been yields are “better than anticipated.”

How the national yield shakes out will determine the markets next move. With the crop size looking like it is getting bigger, we would not chase rallies over the $13.00 level at this time…Jim McCormick

Wheat:  

  • Weekly wheat grain inspections came in at 16.308M bu, which was disappointing as the estimates ranged from 18-26M bu.  Last week’s inspections were 20.582M bu.
  • NOFI, South Korea’s largest animal feed manufacturer, issue a tender for 60,000 tonnes of feed wheat for delivery by February 10th.  The tender closes Tuesday.
  • Kazakhstan announced they are considering joining the Black Sea grain pool with Russia and Ukraine in an attempt to hedge against the volatility involved in the world wheat market.  The 3 nations will export an estimated 70 mmt of grain.
  • Egypt’s Supplies’ Minister announced they have enough wheat stocks to last until February 18th and will issue an international tender sometime in the next month to ensure their wheat supplies last until the end of March.
  • December Chicago wheat settled near the lows on a technical setback and lack of recent export sales, but the contract could find technical support as we close in on the 678’2 low from 10/16 and the 100 day MA of 674’2… 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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