Closing Comments
Lynn Miller
October 1st, 2015
Corn:
Light volume session today the drifted slowly higher with higher wheat prices and talk of lower US supply. Corn harvest expected to be nearly 30% complete.
Export sales released this morning were 29.5 million, a respectable number considering the trade was looking for 28-35. Mexico of all places accounted for 85% of the total. If we delve into the export picture a little bit we will find that the unshipped bushels to the far east (Japan Tawain, S. Korea, Asia excluding China) are at the lowest level since 1986. This could be concerning as other sources of corn are $10-$25/ton cheaper to import. On the same note, S. American exports are at a record pace of 3.45mmt last month up from 2.28 in August
We have traded a tight week closing between 3.85 and 3.90 all four days. With the trade being so tight fisted I wouldn’t expect a lot of action tomorrow unless we come under hedge pressure coming into a harvest weekend. I look for the market to be paying close attention to the private yield reports next week as we look ahead to the Oct. 9th Supply & Demand Report.
Technically all three indicators are hanging on to bullish territory vs.December corn. My price objectives have not changed at $3.94, $4.06, $4.18 and at the top end of the range $4.29. I’m still ok with $4.05 to make a sale on harvest delivered bushels (about $3.35 cash at Craven).
Soybeans:
Export sales this morning came in at 91.9 million bushels (2.5 mmt) vs trade guesses of 1.3-1.7 mmt. No one really knew what to expect following the Chinese signing ceremony last week. USDA reported a fresh 120,000 metric ton sale to China. Meal exports remain strong.
Yesterday’s rally turned into weaker trade as the cash movement improved as well as producer selling. Yields continue to be reported near or above early estimates.
The trade is looking for seasonal bottoms to be put in in the next few days, but the market lacks inspiration to drive much of a rally.
Technically, all three indicators are trying to hang onto the bullish side. I’m still skeptic this market with the Chinese sales last week not being posted (or smaller than believed), a big crop coming and talk of slower demand I’m personally not ready to bank on a run. I’d be willing to price harvest bushels today at $8.00 or better (Craven bid) rather than paying DP charges of $0.05/month when we only have a $0.02 carry to January. Other target level for condo and binned bushels would be $9.28 and $9.50 futures.
Wheat:
Well, we traded higher once again today on the lower US stocks number we were given yesterday to trigger additional short covering. Talk of dry weather in Australia, the FSU and southern US plains just give us a little more to trade.
Export sales were no surprise, they continue to be awful at just 3 million bushels. Cumulative sales for the year are running 18% behind last year.
Technically all three indicators are bullish December Minneapolis futures. Support should hold @ $4.99 with selling targets at $5.35, $5.58 and $5.76.
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