The Grain Report - NORMAL TRADING

NORMAL TRADING.......... With harvest underway demand side fundamentals move to the forefront. Our Monday 10 AM central time weekly export inspection report, a gauge of near-term demand, showed 33.3 million bushels of wheat was inspected by the USDA for near term shipment. This was well over the week prior of 16.4 and four-week average of 19 m.b. A $.50 drop from last Monday and a 1. 50 from our September highs certainly should draw in some demand but can we sustain it. We'll see. We look to Thursday's weekly export sales report now for further demand signals. Don't expect demand to drive the strength in the wheat market as ample ending stocks means rejuvenated demand can find buying off breaks but not rallies. Beans continue strong with 10 m.b. inspected for export, but the key is China in for 6.7 of the total with the four-weeks prior showing 9.5, 3.8, 4 .7 and 2.8. China's protein needs exceed their productivity and they have only to seasonal periods to load up. One, our current US harvest and two, the March through April South American harvest. Corn came in at 22.3 million bushels inspected versus 18 the week prior and four-week average of 24. We need 30 m.b. or more to be demand friendly so the number was disappointing considering the recent harvest drop off in prices. The news services print daily the needs for feed corn in China, setting up the US to be a major exporter filling their needs but they're not a pattern buyer when it comes to corn. Their in at the most unexpected times, so market patient seems to be the current corn trade on demand fundamentals. Monday's crop progress and condition reports came out at 10 p.m. central time. The corn crop came in at 51% good to excellent condition down 2% from the week prior, 68% a year ago and our lowest rating of the year. The decline came largely from the states hit hardest by frost last week. Minnesota down 7% and North Dakota down 9%. Michigan off 1% and Wisconsin off 2% were hit by Frost but seemingly spared by government statisticians. Beans too took a Frost hit coming in at 53% good to excellent condition down 3% from the week prior, 10% lower than a year ago and are lowest rating of the year. Chilly losers were Wisconsin down 4%, South Dakota down 10%, North Dakota 9% and Minnesota down 10%. Monday's lower action was largely fund selling of all markets with bearish foreign economic news but corn pulled back to unchanged on rumors China was looking to buy corn either from the US or Argentina. If we come in and the business went to Argentina, look for a sharp daily drop off in prices here. Turnaround Tuesday strength came on a stronger financial market and poor crop condition reports. Pretty basic trading by funds as they traded everything with no single focus. The crop progress report showed the lowest winter wheat planting progress for this date at 14% planted. Key states well behind were Texas at 8%, versus 23% last year, Oklahoma 4% versus 10% and Kansas 8% versus 10% and our ten year average of 20%. WXRISK.COM the weather site sees today to October 4 as warmer and drier across the southwestern winter wheat states. Putting planting further behind as the historical drought has growers waiting for rain to at least moisten the topsoil before seeding. On October 10 traders may panic on acres not yet planted. Technicals read like this. December corn support is 6.70 with minor point resistance at 7.06, then 7.24. I look for corn to build the right shoulder of a head and shoulders formation the next two weeks. We shouldn't see a close under 6.70 or over 7.24. By the low end support. Beans support remains 13.26 but don't hold a close under as 12.95 would be next support. Resistance is 13.48 then 13.70. December wheat support is 6.50 then 6.40. Resistance 7.04 then 7.20. For those who have the time I will hold my weekly webinar for grains Wednesday at 2 PM central time. For a password to get in call 800-542-1022.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics


Latest Markets Videos