Soybeans lead charge during slow trade week for corn, wheat

Grain & Oilseeds Report

Corn: It is difficult to find a news day slower than what corn faced on Monday. There is little surprise that corn would be slow this week during the typical, light volume Thanksgiving week. When there is a lack of news combined with a lack of volume, it is typical for spread traders to move a market.

This didn’t happen in corn but it was dominant in the bean market. Continued bean support helped to keep the slow grind higher going in corn. It’s still quite tough to tell just where resistance will be found in this market but a first guess might be around the 435 area with the first chart resistance 449 1/2. For now, the sideways grind continues with the longer term trend remaining sideways to lower.

When there is news to report in this corn market, we will watch it closely but for the short term we will continue to assume that no news means a slow bounce closer to chart resistance. Bulls continue to keep the slow bounce moving 2 cents a day in the short term. Longer term we expect more of a lack of news with attention eventually turning to the January report where a slight rise in production will be expected…Ryan Ettner

Soybeans: Soybeans started the week just like they finished last week, on a strong note. Bull spreaders dominated Monday’s action as the January contract led the market higher. The January/November spread is at the widest it has been since September, while the January/July spread picked up 5 ½ cents today. Buying of meal and selling of soyoil was also a prominent feature of Monday’s trade.

The continued talk that China is in the market for beans for February delivery was present, but there was no confirmation of any purchases. Some in the trade were attributing Friday’s rally to China soybean buying, so we have traded the unconfirmed rumor two days now. The rumored reason given for the China bean buying for February delivery from the U.S. is that Brazil has supposedly halted selling beans for this time period due to crop uncertainties and delivery problems.

There is a seasonal play that beans tend to show strength into the Thanksgiving holiday that provided the market with some underlying support for Monday’s push higher.

Soybean inspections were at 66.9 million bushels, which was spun as disappointing as it fell short of the 70 million bushels level. With the weather looking so good in S.A. we are hesitant to chase the market over the $13.00 level. We could even see a buy the rumor sell the fact type of trade if the USDA ever confirms the sale of beans to China as the trading the week of Thanksgiving tends to be light and choppy…Jim McCormick.

Wheat: Wheat finished higher Monday as we continue to chop around sideways starting a week of holiday trade. We have a rounding, bottom low formation on the chart and unless we see this market break into new lows, we may see some additional buying as we try to push back towards some different retracement levels.

Volume was light compared to past sessions for the March contracts. If we can see wheat close above the 663 area in the March contract we could see some additional buying result as a liquidation of shorts. Expectations for Monday’s wheat ratings are for 62% GTE (last week was 63%, last year it was 33% GTE).

There was speculation that with the recent six-month freeze in Iranian sanctions we could see them step back into the global market with some large purchases. Trade analysts are expecting to see a fresh round of export sales to Iran as they may run to stockpile wheat amid issues with their uranium enrichment program. Trade was speculating it could be 400,000 tonnes or more.

Recent snowfall through a large portion of the hard red wheat growing area will help protect the crop from overly cold temps and add moisture to the ground for post-dormancy growing in the spring.

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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