December corn was 2 cents higher for the week and January beans rallied 20 cents for the week. Light and scattered rains fell across the northern corn belt, leaving the harvest window wide open for the bulk of the Midwest; rains will develop for the southeastern half of the belt mid-week, shifting into the southern Plains for the 6-10 day time frame. Most forecasters still see those rains missing the western 1/3 or so of the wheat areas. Extended forecast maps remain warm and dry past that, with above normal temperatures.
The northern 1/3 of the soy belt in Brazil received some moderate levels of rainfall over the weekend. The southwestern ¼ of Argentina received some moderate accumulations as well. The 5 day forecast is wet for the southern and central Brazil soy belt. The 5 day is also wet for the central soy belt of Argentina. The 6-10 continues the wet pattern for Argentina and central Brazil. The 11-15 is dry for Argentina and projects normal to above normal precipitation for the northern ¾ of Brazil.
Corn Comments – The 100 day moving average walked into corn more than it crossed the 100 day average. Values are above the 100 day but have been unable to close above 3.58 to signal a move to 3.74. If such a signal is generated the 3.6575 will be a resistance on the way higher. Trend is up as long as the trend-line valued at 3.44 and rises .75 cent a session is closed above. Funds ended the week short 46,046 contracts. The CFTC report showing them a seller of 8,000 more contracts as of Tuesday. Corn has fumbled into short covering but can shake that last 50k short from the managed money crowd. It also and stumbled at the 360 level despite wandering through the 100 MA. Plenty of grain substitutes in the world and if the producer won’t sell on these small rallies then what is the point to rally further. It’s a pure technical trade in around the margins until the next big story.
Bean Comments – The November pattern of a bound sideways chop transferred to the January contract. The January broke out of its own range (9.4075-10.00) and has entered an uptrend. The market now projects a 10.60 upside target as long as the closes do not drop below 10.00 in the next 5 sessions. An ominous close today gave pause for being bullish. The breakout above the 100 moving average was quickly followed by a close below within two sessions. If the market can’t close above 10.16 on Monday the uptrend is greatly weakened. Funds are now estimated long 113,466 contracts. The CFTC report did show them being a seller of 9,000 more than expected for the week. Soybean futures has rallied to buy acres in the US and price in some weather risk in SA which it successfully accomplished for the most part by trading above 1020 in the Jan. The weather forecasters still wave the long term dryness in front of the trade for Brazil and Argentina but the 2 week outlook keeps rolling that idea forward and just out of reach. For now the problem of dryness is in the background and without that bullish factor soybeans can relax in the limbo of a 980 to 1030 trade until it receives its next market shock. Could be the yield estimate on the 12th or a Chinese export sales announcement.
With the rally in the last week please call me with any target you are looking at so I can watch them. Again the best prices can be during the night or only trade for a few minutes too.