Closing Comments
Lynn Miller
October 27th, 2015
The Mina corn incentive program to fill the bunkers is in full swing. Give us a call today for details and to make delivery arrangements.
This is a temporary program eligible to approximately the first 1 million bushels delivered. All corn going into this program must be 16.5% moisture or less.
Corn:
An interesting phenomena that helped keep the market at bay today was rumors of Brazil corn moving into the SE US poultry markets. Yup, you heard me right. Cheapeast corn we have had in quite some time and the US is importing. Why? You would ask. Well it’s because ocean freight is at an all-time low. So it is cheaper to import than to put wheels under the current stocks. This type of program is generally short-lived and actually does way less damage than the simple rumors themselves, but none-the-less, the market listens.
Harvest progress last night was right on with the trades expectations at 75% complete. Fall fertilizer should start to come into play here shortly, that may generate some need for cash flow and help price some of these bushels; however, I expect we will only see needed bushels priced and the farmer will continue to hold into the new year.
Technically, two of three indicators are now bullish December corn. That the $3.80 yo-yo continues, it held as support for the day, but not sure just how strong this level really is. I continue to be a fan of $3.94 as a selling point I think we will get to. If you’re really bullish you could look at $4.06 and $4.17.
Soybeans:
Yesterday’s losses were driven by fund-liquidation. Today we saw a fair amount of end user pricing below the $9.00 mark to give us some firmer footing. Funds were back buying today. Import/crush margins again positive in China. The big question now is how much will China buy? Several sources talking about 80-83 million tons (this vs. the USDA’s 79). The trick is to gage this right. If we stay in a sub-$9 market demand is huge. An upward rally due to El Nino weather scares could very well price-out some buyers.
Technically, two of three indicators continue to be bearish the November futures. $8.54 is the new support line while my price objectives for the time being have not changed. I’m looking to sell at anything above the $9.00 futures mark. This is a good sale under the current market conditions and with nearby basis improvement. Additional selling points for me are $9.27, $9.50 and $9.72.
Wheat:
Day two of short covering, but today didn’t feel near as good as yesterday with Minneapolis closing down. Most of today’s actions were spread related both to inter-market for the wheats and spreads versus corn. Both Wheat and Corn continue to be range bound commodities. At this point there is no reason to think this has changed and as long as corn stays under pressure wheat has no real story. So, take the rallies when you can get ‘em. This could be a long haul.
Technically, two of three indicators remain marginally bullish the December Minneapolis. Closing above the 10-day moving average for the second day however we haven’t seen the MACD want to crossover. $4.99 continues to be our main line of support and resistance levels remain the same tonight with my selling targets at $5.22, $5.35 and $5.58.
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