Closing Comments
Lynn Miller
October 2nd, 2015
Informa’s newest yield and production numbers were out today.
Corn: Yield: 168.4 vs 167.5 last month
Beans: Yield: 47.2 vs 47.1 last month
At first glance it looked like bearish numbers with yields on the rise. Then you look at total production:
Corn - Production: 13,561 vs 13,585 last month
Beans - Production: 3,878 vs 3,935 last month
And it appears that Informa has cut harvested acres in both corn and beans, so even though we have slightly larger yields, with the reduced acres we have numbers that are more neutral to our situation and maybe even slightly bullish if you are reaching for something to trade.
Corn:
A choppy nothing to talk about session today in corn leaves us unchanged on the week. Harvest progress, a slow start to the export year, lower world prices and lack of farmer selling are all fundamental reasons we can’t get this market going.
With the acreage numbers out today, we tend to look ahead to the Oct 9th stocks report. What will the USDA do? I’m with FC Stone, I don’t believe they will be willing to reduce acres in October, so the only two options they have left are decrease yield (170.5 might do it) or make up some other murky demand level.
Another issue on the fundamental horizon is Argentine corn acres. Some believe that planting may delayed into late December as they wait for the results of the presidential elections and changes to quotas and tariffs. Talk is corn plantings could be reduced from 3.4 to 2.7 million hectares.
Technically two of three indicators remain bullish the December corn futures. Today’s action was hard on the moving average trading through it at times, but we did manage a close above it. The stochastics have tipped and are issuing a sell signal; however, the MACD remains positive. My price objectives have not changed, I still believe $3.80 will hold as support in the short term with selling levels at $3.94, $4.06, $4.18 and at the top end of the range $4.29.
Soybeans:
Not much out there for new news in beans. Harvest continues to push on with good weather. Overall yields continue to come in better than expected in the northern ½ of the US; however, read and article today the late planting is having an effect on the Mississippi Delta states (Missouri, Mississippi, Louisiana) as they harvest crops that are performing behind last year.
Technically, two of three indicators are now bullish the November futures. We closed just a tich under the 10-day moving average and the stochastics are issuing a sell signal. I believe, for the near term, $8.53 should hold as support through a technical correction. What worries me is that we have not been able to change the downward trend, banging on the door both Wednesday and Thursday then closing well of the trend line today. Price targets remain at 8.99, 9.27 and 9.50. However, the trend line will be our toughest resistance at only $8.90 going into Monday’s trade. I am still willing to price $8.00 (Craven bid) or better beans rather than pay DP. Actually, I’d be willing in investigate Basis Fixed contracts vs. DP as well. Carry to January being only $0.02 and March only $0.06 I am leary to pay $0.05/month and feel confident I will be ahead at pricing time.
Wheat:
Then there’s wheat. This little rally now, though not fast moving, has been a steady up for the past 4 weeks. The USDA gave us smaller stocks to play with on Wednesday than slammed our hopes with truly pathetic export sales yesterday. And then basically ran out of stories today.
The dry weather stories in FSU, Australia and Southern US Plains have been part of the driver behind this rally. Talk of rain chances in the US and Russia could slow this down. We need more weather to keep a positive light on this market.
Technically, two of three indicators remain bullish December Minneapolis futures. We are knocking on the 10-day moving average but managed to stay just a pinch above it. The stocahstics have issued a sell signal though. As for a support, the main level is back to contract lows at $4.99; however, I believe since we have change the trend, the down trend line should now act as support and hopefully hold us above $5.12 should we see a technical correction now. My selling targets have not changed, still at $5.35, $5.58 and $5.76. 
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