Corn: Once again, corn managed another day of higher highs and higher lows. continuing the short term grind higher. Obviously, with holiday trade in full swing, the total range traded on corn Monday was very small. While corn does continue this short-term grind higher there was still no test of the major resistance of 440-3/4, which means that light buying is still just using up the “easy” chart room available.
Having just a few buyers continue the slow push higher is one thing. Expecting these few buyers to take out major resistance is a much different story. Most will likely attribute Monday’s corn bounce to small scale fund short covering going into the end of the year along with hopes that Vilsack’s recent visit to China might ease some of the recent GMO rejections going forward.
As a whole, there continues to be enough reason for a slow grind higher to resistance, but bulls want to be careful about expecting a breakout. Bears will stay quiet unless the bulls can give them a selling price they just can’t avoid, which will be approaching the 440 level. Today’s trading range for March was 4-1/4 cents, which should be expected going through the rest of this week if not also next week…Ryan Ettner
Soybeans: Beans put in a lackluster performance Monday with light volume and open interest as we head into the holidays. The March contract settled at $13.19-3/4, just above it’s low of $13.19. Looking ahead, the bulls are geared up for continued weather issues, in particular a hot and dry trend in Argentina as we head into the new year. What’s important to note is that it is way too early to be discussing weather problems and the potential effect on yield. We would suggest end of January into February before yield should be a topic of discussion.
Watch for choppy trading in the $13.00 to $13.40 range through the end of the year. With the inverted cost of carry, you should be selling old crop beans as it doesn’t pay to store them. New crop should be protected with our three-way option strategy. Happy holidays to all.
Wheat: Wheat finished the day lower, closing again into new lows. We continue to find little reason to change the trend as there is nothing threatening the wheat crop. International prices are still lower than those in the United States, and we are currently not competitive with our prices. We should continue to look for lower trade moving forward as holiday trade usually will see lighter volume. Funds are still holding a large short position and until we see this change, we will probably continue our slide.